CAPACITY BUILDING FOR COOPERATIVES

1
CAPACITY BUILDING FOR COOPERATIVES

• ISSUES FOR DISCUSSION
• By
• Baqui Khalily
• University of Dhaka

2
DEFINE CAPACITY BUILDING FOR COOPERATIVES

• Capacity Building for Cooperatives should be
  defined in light of the goals of cooperatives
• The goal is to organize people into an informal
  (?) institution in order to attain a set of
  mutually acceptable goals economic and social.

3
What should be the Underlying Driving Forces for
Capacity Building?

• Efficiency and Effectiveness
• Sustainability of Cooperatives both short and
  long run
• Building confidence, trust and respect for
  sustainable shared goals
• Adaptability to changing environment
• Interaction with external agents
• Diversification of activities to maximize
  institutional and individual interest
• Expansion and replication of cooperatives

4
What are the Constraints in capacity building?

• Limited capacity of the organizational structure
  to protect member-interests ensure development of
  the cooperatives poor governance
• Problem in building confidence, trust and respect
  among the members
• Principal-Agency problem prevails resulting
• Inadequate disclosure and transparency
• Lack of training in management, economic
  investments and to respond to challenges
• Interaction with external agents of changes?
• Limited or no excess to information technology

5
Major External Challenges?

• Development of informal primary cooperative
  society or groups in Micro Finance
• Development of private sector with ample
  opportunities
• Expansion of formal financial services creating
  opportunities for individual borrowing
• Limited access of cooperatives to bank credit
• Limited marketing network or inefficient
  marketing system
• Increasing political interventions
• No promotional agency for coperatives

6
Bangladesh - Case of Failure

• Heterogeneity in memberships
• Lack of political government will and pro-active
  government agency
• Classical conflict between individual and
  institutional interests
• No training
• Dominating role of Micro Finance groups
• Limited access to bank credit because of their
  poor repayment performance evidence of
  political patronization

7
Challenges for Rebuilding

• Creating enabling environment with appropriate
  legal and regulatory framework
• Reducing government interventions
• Using external facilities for training at
  affordable cost or subsidized costs
• Linking with Micro Finance Institutions for
  financial cooperatives
• Reducing conflict between agents in traditional
  marketing chain and marketing cooperatives
• Building confidence, trust and respect of
  individual members, external agents and society
• Empowering cooperators in the society

8
Additional Support Services Required

• Learning from the best practices
• Continuous research to identify problems and
  solutions
• Exposure visits
• External agency to advice, guide and promote
  cooperatives SHG being promoted by NGOs