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Class : 11
Unit : Business

Explain the role of co-operative in developing countries.

Ans : In developing countries, co-operative organization have been playing important role in economic, social and moral development of people. Its main motive is to minimize the role of larger enterprises, middle man and money lenders. At present in developing countries like India, China, Sri Lanka and even in Nepal cooperative organization have been playing an important role in improving economic condition. They are:- i) Encourage in saving:- They collect small saving from members and mobilize in productive purpose. They supplies required goods and services to members in minimum prices as and when they are needed. It encourages people to save their minimum earning and to use in a productive activity. ii) Provide institutional credit:- In developing countries, rural cooperative provide institutional small credit to members in term of primary credit, agriculture credit when they are needed. They charged a nominal rate of interest from member and contribute to develop their social and economic condition. iii) Terminate the middleman:- Cooperative society terminates the role of middleman by purchasing goods directly from manufacturers and supplying the same to members and local customers. Community can get required goods and services at a reasonable price. iv) Democratic society:- The concept of cooperative society is the outcome democratic socialism. This organization are democratic institution where all the members have equal right to participate in the major decisions and expressed opinions, views, ideas. v) Generating employment opportunity:- Cooperative organizations provide employment opportunities to the various people in different places on the basis of their skill, knowledge and experience etc. It can solve the unemployment problem and reduce poverty by providing employment opportunities. vi) Improvement of production and distribution:- Cooperative organization helps to improve productivity and distribution system. Manufacturers are involved in the production and suppliers are involved in the distribution. vii) Improve living standard:- For the members, involvement in cooperative means involvement in the economic activities. It helps them to obtain economic gain and help to develop their living standard. viii) Proper utilization of resources:- Cooperative society utilize both natural and human resources for economic development of the country. It helps to eliminate financial corruption and provide necessary guidance to minimize unnecessary experience and wastage.
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