Membership benefits and responsibilities

Benefits and responsibilities 5 MAIN BENEFITS Savings Loans Networking Dividends Corporate power There are 5 benefits that cut across a typical cooperative society in the Ugandan context

Savings Development of a savings culture put something aside for tomorrow, or invest, to make additional income save and invest to escape poverty contribute regularly (monthly) you cannot withdraw your money The first thing cooperative societies do to individual members is development of a savings culture. It is an age long established fact that nobody can escape poverty without a savings habit. Anybody that spends everything on consumption is just a step away from poverty and its various consequences, no matter how rich the person is today. A savings culture means, irrespective of how much you earn today, and your needs, you put something aside for tomorrow, or invest, to make additional income. This, however, is a great challenge for many people, especially for low income people, whose needs are far more than what they earn. Some of them attempt to save, but because the saving is always within their reach, they find it difficult not to spend the money. Yet, everybody needs to save and invest to escape poverty. This is made relatively easy with cooperatives. As a member of a cooperative, you must contribute regularly, most times monthly. Irrespective of your needs, you must save. Also, because the money is not within easy reach, you cannot easily access it to spend. Savings may not be as effective as you want it to be compared with other methods of saving. A cooperative works in such a way that once you save you cannot withdraw your money except when you are terminating your membership.

Loans Access to loans either in cash or in the form of goods. Access a loan promptly. Contributions serve as collateral fellow contributors accepted as guarantors. Friendly Interest rate and repayment terms Friendly rules and regulations The second thing you benefit from a cooperative as an individual is access to loans either in cash or in the form of goods. As it is difficult for a camel to pass through the eye of a needle, so it is for the average individual to get loan from the banks in Uganda. For low income earners, it is even worse, because they don’t have collateral. Even for those that can meet the conditions for bank loans, the loan may not come promptly as needed. But as a member of a cooperative, you can access a loan promptly. Your contributions serve as collateral and fellow contributors are accepted as guarantors. Also, the interest rate and repayment terms are not crushing as that of the banks. This easy access to loans has helped many people achieve improved welfare. We all need credits to pay rents, meet short term needs, buy electronic appliances, school fees and the rest. So credit is one major benefit members benefit from a cooperative. If you save in a commercial bank, you still may not reach the requirement of getting a loan there but with the cooperative, as long as you adhere to the rules and regulations and you can save consistently in a minimum period prescribed in the bylaws, you are sure of getting a credit.

Networking A platform to network. Showcase your products with the members of the cooperative. Meaning you can network. Participate in the running of the business of the group, Acquire knowledge and expertise Opportunity to acquire business acumen. Cooperatives give you the platform to network. With a cooperative society that has members of about 200 - 300 or more, it means that whatever it is you are doing as an individual, you can showcase such products with the members of the cooperative. Meaning you can network. Also, with a cooperative, the individual participates in the running of the business of the group, and in the process, acquires knowledge and expertise, which can be beneficial in his personal affairs. Compare these benefits to investment in shares or bonds or in a collective investment scheme. These other investment options do not impact savings culture, neither do they provide easy access to loans. The individual also does not have the opportunity to enjoy corporate power. In fact, he may become a victim of corporate power. And because the individual does not participate in the management of the companies or his investment, he does not have opportunity to acquire business acumen.

Dividends Annual dividends are paid on share contributions That simply means that when you have paid shares for a year, the cooperative a percentage of the surplus to its members depending on the shares you bought. There are always annual dividends that is paid which a lay man will call returns on investment. That simply means that when you have saved for a year, the cooperative is bound to share what we call surplus to its members depending on what you have saved.

Corporate Power Corporate power is another benefit of cooperative to an individual. There are some things that a corporate body can achieve easily, which are near impossible for an individual. Collective power in the acquisition of properties, negotiating deals, etc... Ease of payments and other benefits attached to being a member. Cooperatives have legal experts and government is involved so members are not cheated. In the area of acquisition of land and other properties, cooperatives come in handy. They assist such processes as ease of payments and other benefits attached to being a member. For example, if an individual buys a parcel of land, the land owners can go back and resell the same land to another person. The individual, especially a low income earner, most of the time loses out eventually or may have to repurchase the land. But if it was a cooperative, the land owners will not even try such mischief, because from the beginning, a legal expert and government is involved (remember cooperatives are regulated by government).