Effect of Financial Intermediation on the Output of Members of Multipurpose Cooperative Societies in Anambra State, Nigeria
Keywords:
Financial Intermediation, Output, Cost of Credit, Amount of Credit Borrowed, Credit Repayment PeriodAbstract
This study explores the effect of financial intermediation on the output of members of multipurpose cooperative societies in Anambra State, focusing on a membership base of 6,986. Employing a multi-stage sampling technique, a manageable population of 861 was targeted, from which a sample of 287 members was determined using the Taro Yamane formula. The independent variables included availability of credit, savings mobilized, cost of credit, amount of credit borrowed, credit repayment period, financial literacy, and loan repayment performance, while the dependent variable was defined as the output of cooperative members. Theoretical grounding for this study is anchored in the financial intermediation theory, primarily articulated by Gurley and Shaw (1960). The theory posits that financial intermediaries, such as cooperative societies, play a pivotal role in the economy by channeling funds from savers to borrowers. Demographic profiles were analyzed using simple percentages, while descriptive statistics for objectives employed mean and standard deviation, leading to insights into the performance of financial intermediation. Hypotheses were tested using an econometric regression model, revealing a significant positive correlation between the identified independent variables and the output of cooperative members. Preliminary findings indicated that increased access to credit, improved financial literacy, and favourable loan repayment conditions substantially enhance members' productivity. The study concludes that effective financial intermediation is crucial for improving the economic performance of cooperative members in Anambra State. Recommendations include enhancing financial literacy programs, ensuring favourable credit conditions, and improving access to savings and credit facilities. The implications of this study highlight the need for robust financial services to stimulate cooperative activities, fostering economic growth and development in the region.
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