frequently asked questions

Why Co-operatives are important for the economy

The main strength of cooperatives is that they pool the resources of their members and as a consequence they allow their members to reduce costs, face the various challenges of the enterprise and increase their individual visibility and their capacity to negotiate prices and market their products: members, individually, would have greater difficulties running their enterprise.

i.    Importance of cooperatives to members

•    Cooperatives are important tools to helping members out of illiteracy through training;
•    Members receive training on how to practice modern farming methods;
•    Members can easily receive farming inputs such as improved seeds and fertilizers;
•    Availability of market for their produce and at reasonable price;
•    Mutual support to vulnerable members of the cooperatives especially by paying “Mutuelle de Sante”, giving goats, pigs and rabbits;
•    Cooperatives provide support funds to their members from their reserve accounts to cater for issues like school fees, health bills and building houses;
•    Cooperatives members easily access loans from the financial institutions for development projects;
•    Cooperatives provide dividends to members which defer depending what each member supplied to the cooperative.

ii.    Importance of cooperatives to the country

•    Cooperatives pay taxes which are useful to country’s infrastructural development;
•    Cooperatives are very good channels to disseminating government programs such as Girinka, Ubudehe, 9 & 12 year basic education, made in Rwanda among others to all members;
•    Cooperatives provide jobs thus solving the problem of unemployment in the country;
•    Increased production in different sectors such as Agriculture and off farm activities;
•    Cooperatives can lead to the development of the district where they operate;
•    Cooperatives can help in solving the problem of balance of payment while exporting locally made and produced goods.

Why Co-operatives are so special

Cooperatives are enterprises that produce goods and services like any other enterprise. They differ from other enterprises in that their owners, known as “members”, organize their activities to serve their needs first, before seeking to maximize profits or increase their share in the market. Cooperatives are interested above all in enhancing their members’ capacity to produce or to consume.

Many cooperatives may produce goods or services for sale in the market, and may make significant profits, while others may simply provide a service to their members. Some cooperatives may distribute the profits from the sale of products among the members but most allocate any benefits to the development of the cooperative, limiting the compensation to members in proportion to their transactions with the cooperative. That is why in many countries, cooperatives are considered as non?profit organizations.

As a rule, a cooperative is owned by many members and each member has equal voting rights, independently of the capital they invest. This is known as the “one member one vote” principle.