Credit and thrift co-operatives in Nigeria: A potential source of capital formation and employment

Unemployment is a major challenge in Nigeria and many other developing countries. There is unemployment among professionals and non-professionals alike, there is unemployment among young school graduates, experienced professionals, tradesmen, and non-skilled workers in Nigeria. The consequences of unemployment in Nigeria are grave and may be classified as social and private. They include increase in crime rates, loss of potential output, poverty, and loss of potential tax revenue due government, professional studentship and family instability. In Nigeria, as in some other developing countries, job losses by householdsʹ heads have negatively affected some homes, leading to family disintegration. Unemployment can explain the rising trends of female headed households in Nigeria. One major source of unemployment in Nigeria is insufficient capital for investments. The Harrod-Domar (neo-classical) theory encourages savings as a source of capital formation for investments with the consequent employment generation. This work identifies co-operative credits and thrift associations as a veritable source of capital formation which is required for investment purposes. The thrift cooperative as a micro finance agency is also a direct source of employment for those engaged in its management or coordination.