Cooperatives: Driving force for poverty alleviation, food security
10 Dec 2017 National-News
Cooperatives are promoting income generating activities and improving access to banking services to rural and urban households, thereby playing significant role in achieving the national growth and poverty reduction strategy, according to the Federal Cooperatives Agency.
Berhanu Gufera, Director of Cooperatives’ Financial Development with the Agency, told The Ethiopian Herald that cooperatives in Ethiopia, in ups and downs, have registered numerical growth over the past decades both in terms of membership and capital. Thanks to the existence of sound policy and experts commitment, cooperatives are transforming the subsistence economy to surplus and creating conducive environment for the development of voluntary based associations and unions in the country, he added.
According to Berhanu, the number of Primary Saving and Credit Associations, excluding unions, has reached 19,788 as of June 2017 with a total saving capital of 14.5 billion Birr. The number of members both in rural and urban has also reached 4, 180, 333, of which 1,704,000 are females and 2,476, 230 males, he noted.
In this regard, Assistant Professor, Department of Cooperative Studies at Mekele University Kifle Tesfamariam says the number of both saving & credit associations and cooperative unions has increased from 26,672 in 2009 to 56, 044 in 2014 showing a double digit growth rate of 22 per cent per year.
The total number of members during the same period has increased from 5.8 million to 9.2 million, 10 per cent of the population, and their capital has increased from 1.2 billion Birr to 8.8 billion Birr, he states.
According to him, cooperatives have inherent advantages in alleviating poverty, ensuring food security, and creating job opportunities. Besides, they have immense potential to deliver goods and services in areas where both the state and private sectors have failed.
In Ethiopia, 50 per cent of the population directly benefit from the services of cooperatives. Over 800 thousand people are employed and earn most of their income from cooperatives.
Regarding credit provision capacity, Berhanu said cooperatives could provide about 2.5 billion Birr credit for members. But, the rural saving capacity is 800 Birr while in Urban areas it has reached 8,000 Birr.
Lack of skilled human power and low provision of audit are some of the challenges of cooperatives in the country. The Agency is providing capacity building supports for cooperatives and creating conducive environment for the establishment of new cooperative associations and unions, Berhanu said.
Source: The Ethiopian Herald, Dec. 10, 2017