Impact of thrift organization on economic well being of individuals and organization in Enugu state

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Impact of thrift organization on economic well being of individuals and organization in Enugu state.


This study was undertaken to investigate the impacts of thrift organizations on the economic well-being of individuals and groups in Enugu. The first step was to find out the meanings of thrift means the habit of saving money and carefully spending it so that none is wasted. Organization we discovered means a group of people in business. From this we deduce that thrift organization are a group of persons who encourage people to save money, use money carefully to avoid wasting money. Banks mortgage institution, micro credit institutions were also studied and were found to be thrift organization. After reviewing the opinions of those involved in the informal thrift organizations as well as reviewing relevant literature on the formal ones banks       co-operative society, data were collected by way of interviewing, method of data analysis and presentation, sample size and sampling techniques, and instrument for data collection. We found that most potent thrift organizations are the mutual assistance groups organized in towns and villages in Enugu State. In Enugu metropolis, it was found that traders engage in (ISUSU) to help them improve and increase the wars in their shops some buy Cars, Motorcycles etc. we recommended that Government should encourage people though education on radio and television on the benefits of mutual aid assistance to enable more people join the groups.


Title page        —             —             —             —             i

Approval page  —             —             —             —             ii

Certification     —             —             —             —             iii

Dedication       —             —             —             —             iv

Acknowledgement           —             —             —             v

Table of Content              —             —             —             vi

Abstracts         —             —             —             —             ix


1.1      Background of the study         —             —             1

1.2      Statements of the study          —             —             5

1.3      Objectives of the study           —             —             6

1.4      Significance of the study         —             —             8

1.5      Research questions                 —             —             10

1.6      Scope of the study   —             —             —             11

1.7      Limitations of the study           —             —             12

1.8      Formulation of Hypotheses      —             —             13

1.9      Definition of terms   —             —             —             14


2.0      Literature review     —             —             —             16

2.1   Informal thrift organizations    —             —             18

2.1.2 Isusu or traditional or contributions in the rural areas

—             —             —             —             —             19

2.1.2 Isusu or traditional thrifting in the urban areas      22

2.2   Co-operative society        —             —             28

2.2.2 Historical Overview                —             —             33

2.2.3 Co-operative movement in Nigeria         —             34

2.2.4 Types of co-operative societies              —             35

2.2.5 Thrift and credit co-operative society     —             37

2.2.6 Motive for forming or joining co-operative society  39

2.2.7 Factor influencing formation C/S            —             41

2.2.8 Benefits of joining co-operatives            —             43

2.2.9 Court of appeal staff Enugu multipurpose co-operative          society limited Enugu             —             —             45

2.3   Commercial banks                  —             —             54

2.4   Mortgage institutions               —             —             56

2.5   Micro credit institutions           —             —             57

2.6   Insurance companies              —             —             58

2.7   The impact of thrift organizations on Economics well being of the people of Enugu State           —             59

2.8   Summary of review                 —             —             63


3.0      Research methods   —             —             —             65

3.1   Research design      —             —             —             66

3.2   Area of study           —             —             —             66

3.3   Population of the study           —             —             67

3.4   Sample size and sampling techniques      —             67

3.5   Instrument for data collection  —             —             68

3.6   Method of data collection —             —             69

3.7   Validation and reliability of the instrument              70

3.8   Method of data analysis and presentation               72

3.9   Decision rule           —             —             —             72


4.0   Data analysis and presentation               —             73

4.1   Data analysis           —             —             —             73

4.2   Data presentation    —             —             —             74

4.3   Discussion               —             —             —             78


5.0   Summary of findings, conclusion, and recommendation

—             —             —             —             —             81

5.1   Summary of findings               —             —             81

5.2   Conclusions             —             —             —             85

5.3   Recommendations   —             —             —             86

Questionnaire          —             —             —             88

References              —             —             —             90



We shall begin the consideration of the topic of this project by defining the major concepts in the topic. And these are impact,individuals etc. let us there fore start with the concept of thrift.

1.1                                                  Background of the study       

What is Thrift?

The Oxford Advanced Learners Dictionary define thrifts as the habit of saving money and spending it carefully so that none is wasted.

Encyclopedic world dictionary defines thrift as economical management, frugality and provident on its part. Chambers 20thcentury dictionary define thrift as the state of thriving, frugality, economy, prosperity, increase of wealth gain, profitable, occupation, savings etc. from these definitions we can deduce that thrift is about saving money and sending money carefully so that none is waste. Thrift is thus the avoidance of waste in the use of money. If follows therefore that thrift increase wealth. It is also concerned with the economic management of resources. From these definitions we are faced with the fact that thrift result in increase of wealth. Let us at this point define organization. Chambers again defines organization variously but the one that is relevant to this study is “a group of people who form a business club etc together in order to achieve a particular aim. Chambers 20th century dictionary defines organization as a body, society etc.”

Encyclopedic dictionary defines organization as a body of persons organized for some end. Combining the definition of thrift and organizations are those business organization for the purposes of saving money and spending money carefully without wasting money.

Since the key word in the definition of thrift as used in this research study is saving money and spending some without waster, we should include in our thrift organizations that institutions that encourage individuals and group to save money. These institutions are, for the purpose of this study, divided into informal thrift organization and formal thrift organization, informal thrift organization.

These will include the locally organized. Contribution by groups of workers, traders, house wives etc. who agree to contribute certain some of money which may be shared among the contributors at the end of an agreed period of time.

The Local name for this is called “ISUSU”, Isusu can also be organization in such a manner that the group contributes certain amount of money for which is collected by a member of the group at the end of every month or week until all the members in the group have receive their contributions. The amount may range from a little as N500 to as much as N100,000 depending on the expected income of members of the group.

To be include in the informal thrift organization on the monthly and daily contribution organization or institutions. Details of the method operation of daily contributions shall be discussed in chapter two. Formal thrift organizations may include the co-operative societies, micro credit institution mortgage institutions, as well as banker.

However, the study will concentrate on the informal thrift organizations and the co-operative society

1.1b        Impact and economic well being, impact has been defined as the powerful effect something has on some body or something. Another authority defined impact as influence or effect exerted by a new idea, concept etc. yet another authority defines impact as the impulse resulting from a new idea or theory. Strong, effect, influence etc. The phrase economic well being is not easily defined and to recourse it taken, to as connected with trade, industry and development of wealth of a country’s an area or society, it is also defined as process, a business or an activity etc. Well being is simply define as welfare and welfare is defined as the general health, happiness and safety of a person etc. it follows from the above, that for the purpose of this research we are investigating or studying the influence effect on thrift organization as defined above on the trade, industry and development of wealth and the overall effect on the happiness of individuals and groups in Enugu. The question that should now be posed and answered is that, why the study or the impact of thrift organization on the economic well being of individuals and organization important at even necessary. It is to this question that we shall direct our attention presently.

1.2                                       Statement of the Problem

There is no doubt that Nigeria is a rich country or at best a potentially rich country. However, the truth is that inspite of the nation’s wealth, majority of our country men and women are poor. According to Karl Maier (2000), half of Nigerian’s 130 million that people live in abject poverty and Okoloagu posits that since Karl Maier conducted his research in the year 200, poverty levels reduce to 300%. Similarly, the limited nations humans development index ranks Nigeria as the Fifth protest country in the world. The fact that Nigerian’s are extremely poor.

However, the view of the obvious excruciating and the apparent mobility, unwillingness of governments at all level to lift the people from poverty, it becomes necessary for individuals and groups to take the initiative to help members out of poverty. Apart from poverty, development requires the mobilization of funds for small and medium scale enterprises. It follows therefore, that for real poverty alleviation programmes since it will provide answers to questions of how to organize individuals and groups to take the respector destines in their own hands. So the researchers want to examine the impact of thrift organization.

1.3                                   Objectives of the Study

This study will be carried out with the following objectives in view.

(i)             To investigate the existence of organization on Enugu.

(ii)           To investigate the nature and activities of such thrift organization in Enugu.

(iii)          To examine the level of awareness of the member of the public of the existence of thrift organizations in Enugu.

(iv)         It members of the public are aware of thrift organization whether the public, especially the Urban, are making adequate and appropriate use of the services of such thrift organization in Enugu

(v)           To examine the benefit which individuals and groups derive for the activities of thrift organization provided above, to investigate whether banks qualify as thrift organization in the context of the study.

(vi)         To examine or determine whether Isusu and daily contribution or monthly contribution organization and groups qualify as thrift organizations.

(vii)    To determine whether co-operative societies can in described as thrift organizations and if so, to determine the level of encouragement government at all levels are giving to thrift organizations if any.

(vii)        To suggest area of improvements in the activities of thrift organizations and suggests ways of making more individual aware of the benefits of membership of thrift organization to members of the public especially the rural and urban poor in Enugu.

1.4                                   Significance of the study

This study is new in the sense that this is the first time a study of the impact of thrift organization is being examined. Perhaps there has seen so many studies on the impact of co-operative societies the banks primary mortgage institutions, the formal thrift organization, but this is the first time the informal thrift organization are focused on. This study is therefore, not only high light the activities of organizations of Isusu daily and monthly contributions suggest ways of bringing such activities under formal control, so as to protect members of the public especially urban and rural poor on the benefit of organizing thrift organizations. This study will also be useful to government and their agencies involved. The study will be useful to non-governmental organizations involved in poverty alleviation. Students and lecturers of higher institutions who are involved in the study extremely useful as the report will provide answers to the questions posed by paulity of research materials of the oldest from of co-operative (Isusu), which has been practiced in rural villages and towns by farmers, traders, market women, workers their various offices yet no meaningful research which has been done on the activities and impact of this form co-operatives.

Finally the study will increase the body of acknowledge and will provide materials for reference to student and teachers in the area of thrift organization such as co-operative societies etc. The result of this study will open a flood gate for similar studies in the future. Since poverty and its deviating impacts is likely to remain with us for a very long time, the study of institutions and activities geared towards poverty alleviation, eradication or elimination are likely to be interest or hold the attention  of researcher for very long times.

1.5                                           Research Questions

The study will generally be guided by the following question.

(i)             What are the thrift organizations?

(ii)           What are the functions of thrift organization?

(iii)          Are thrift organizations necessary?

(iv)         Have they any economic and social relevance to people of Enugu. In other words, are they beneficial and if so how can their activities be improved?

(v)           Is poverty a problem in Enugu and if so are thrift organizations important in the war against poverty?

(vi)         In what ways have individuals and groups benefited or suffered from the activities of thrift organization?

Mobilized for small and medium scale entrepreneur against poverty.  Be encouraging the masses to save and pool their resources together. Thrift organizations as defined above will make and have made a  huge difference in the lives of rural and urban, poor. The problem is therefore that in the face of government unwillingness or inability to come to the aid of the poor. If is left for the poor to organize themselves, in thrift organization through which they can save small amount of their money in order to lift them selves from poverty by pooling their resources together to establish micro, small and medium scale business units.

1.6                                   Scope of the study

The work will cover only Enugu State of Nigeria. It will also study informal financial groups as exemplified by the “Isusu” credit scheme. Emphasis will be placed on these group located in Enugu, Abakaliki, Nsukka and Oji-River Local Government Areas. Ten informal financial groups will be selected from each local government area while small scale business entrepreneurs who will form part of the respondents will be selected from each local government area, for the study.

All the delimitations enumerated above are considered normal for a study of this nature in a developing country like Nigeria, with paucity of information and data. None of them should be considered serious as to invalidate the results.

1.7                                   Limitations of the study

Like any other human activity, this study has its limitation and constraints. Due to high cost of materials and increasing transport fares, financial resources constituted a major constraint.

Time considerationsand the distance involved in collecting the primary data is another limitation of the study. This is because the time lapse between the end of course work and the submission of the project is greatly inadequate. Moreover interview bias and attitude of respondents constituted a constraint on the researcher as some respondents gave inaccurate information or failed to return their questionnaires.

Another constraint to the study is the same size. Not all the informal financial groups in the local government areas of interest were considered. 40 informal groups and 500 small scale business entrepreneurs chosen for the study do not cover all the groups and people concerned in the study.

Finally, there is a limitation on the generation of the study because the work is a case study of

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