Analyze 5 demerits of community banks like SACCOS
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Answer:
7 July 2001, has just marked at the 7th UN International Day of Cooperative and 79th ICA international day. It is estimated that there are now over 760 million individuals who have chosen the cooperative advantages. Values, principles, ethics, and business competence constitute the cooperative advantages both for member and forth e community in which they operate. Since cooperatives are member owned and member controlled under democratic principles, they certainly put people first. In many countries, cooperatives are in for front in the production and marketing of food staffs, electricity, and consumer goods as well as financial insurance and social services. Both directly and indirectly cooperatives help both member and employees to escape from poverty or to protect those of them who may be facing the risk of poverty (Imoisili, 2001).
According to Burt (1997), the benefit that cooperatives provide can be direct or indirect. Direct benefits may include better assurance of supply and access to markets, both of which can directly increase a business net income. The indirect benefit may include a great influence on input and output markets, improved qualities, better services, increased business knowledge and participation in research and development. The cooperatives can increase members’ return in many ways such ways are, reducing cost and pricing.
Moreover, as ICA (1997), state the role of cooperative is to provide greater benefit to the members such as: increasing individual income or enhancing a member’s way of living by providing important needed services. The cooperative may be a vehicle to obtain improved market or providing source of supply or other services, otherwise unavailable if members act alone.
Explanation: