Effect of Participation in Cooperative Societies on the Survival of Small Scale Business Enterprises in Lagos State, Nigeria

Nigeria’s economy is dominated by small businesses in agriculture, manufacturing, commerce, industry, and services. Like any other part of the world, small and medium businesses in Nigeria are seen as the backbone of all economies and are key sources of economic growth and development. The study was carried out in Ikeja Local Government Area, Lagos State. The study’s main objective was to assess cooperative participation in the survival of small-scale business enterprises in the Ikeja Local Government Area of Lagos State. In all, 144 small-scale business enterprises and 102 cooperative societies were interviewed for the survey. The analysis of socio-economic variables showed that most small-scale business owners were male (72.2%) rather than (27.8%) of the female gender. The majority (66.7%) of the small-scale business owners were in the age range of less than 30 to 49 years, which indicates that most of the small-scale business owners are in their active age. The majority (94.4%) of small-scale business owners obtain their credit from cooperative societies, while only a few (4.2%) indicate banks as their source of credit. Most (98.6%) pay interest on loans obtained, and 77.8 per cent use the loan collected for business purposes only. The loan repayment index has a value of 55.94 per cent. The amount granted to small-scale business owners, the nature of their sales, and their net income are positively significant at 1 per cent and thus influence their profitability. The budgetary analysis revealed that the profitability index is 0.59, the rate of return on investment is 146.6 per cent, and the rate of return on variable cost is 321.1 per cent, while the operating ratio is 27 per cent, indicating that the project is profitable. Therefore, small-scale business enterprises in the study area were found to be profitable. Based on the findings of this study, it is recommended that formal institutions should admonished to provide more loan services for small-scale businesses to help the development of small and medium-scale enterprises. Furthermore, loans offered should be repaid promptly to encourage the cooperative societies to offer more loans to more benefactors, and the government should aid cooperatives since they are the major providers of credit services to the small-scale business owners.