Wednesday, 17 April 2024

COOPERATIVES

Mandate

To create an enabling environment and provide services required for the development of a competitive and self-sustaining cooperative sector.

 

Services provided

-Public Sensitization about Cooperatives

-Cooperative Registration

-Education and Training

-Cooperative Audit Services

-Inspection and Enquiries

-Settlement of Cooperative Disputes

-Stakeholder Coordination

-Liquidation of Cooperative Societies

 

The main responsibilities of the Cooperative Division:

-Coordinating the development and growth of the Cooperative sector

-Leading the development and review of policy relating to all forms of Cooperative Societies Administration of laws and regulations governing Cooperative operations;

-Registering Cooperative Societies and assigning to them legal personality;

-Regulating and supervising cooperative societies at all levels;

-Supporting capacity building of cooperatives through Education and Training of Members, Leaders and Managers;

-Promoting business entrepreneurship in the cooperative sector;

-Supporting Cooperative access to investment opportunities at national, regional and international levels;

-Advising other Government agencies on policies and strategies relating to cooperative development;

-Providing Accounting and Audit services for non-financial Cooperatives

-Liquidating cooperative societies in accordance with the law

GUIDELINES FOR THE FORMATION OF SUSTAINABLE COOPERATIVE SOCIETIES

Cooperatives are a tool for inclusive economic participation and a means for the country’s Socio-economic transformation. As such, there is need to support the development of competitive and sustainable Cooperative Societies in all possible sectors of the economy. To achieve this, it is important that the formation and registration of cooperatives is effectively guided; the Office of Registrar of Cooperatives recommends the following steps to guide the formation of sustainable cooperatives:

Recognition of need and mobilisation of initial members.

Since Cooperatives are business entities, they should start with the recognition of a need or an opportunity. A cooperative should be formed by individuals with like needs (Common Bond) who want to start a cooperative business. It must be based on sound business criteria in order to ensure the sustainability of its activities. At this stage, community groups of at-least ten people must be sensitized and hand-held by promoters (NGOs, Development Partners, Private sector as well as Government agencies. This stage requires promoters to introduce the cooperative concept at the onset of group mobilization. They should ensure that membership and group formation is voluntary and based on the needs of the people.

Establishment of interim leadership structures

The group should hold informational meetings of potential cooperative members and others in the community to explain the identified need and how a cooperative would address it. Interim leadership structures (Interim Committees) should be established to champion the process. Ensure that the following are present:

-A general agreement on the nature of the problem which the cooperative will address.

-The cooperative form of business is the best to meet the group’s needs in the circumstances.

-There is sufficient interest among potential cooperative members.

-There are individuals willing to serve in a leadership capacity.

-Survey of potential members

Potential cooperative members should be surveyed on the need for services, volumes to be purchased or marketed, willingness to join, willingness to contribute finance, and use the cooperative. It should be understood that cooperatives are not always the best form of legal business structure for every economic endeavour or for meeting every need.

Conducting a feasibility study of the business

A feasibility study should be conducted to identify any “make or break” issues that would prevent the cooperative from being successful in the marketplace. In other words, a feasibility study should  determine whether the business idea makes sense. It should analyse the Market, Organisational and Financial issues of the ensuing cooperative.

Development of a Business Plan

If the feasibility study results are favourable, the interim committee should develop a detailed business plan that serves two primary purposes:

  • To provide a blueprint for the development and initial operation of the cooperative.
  • To provide supporting documentation for potential members, financial institutions and other investors.

Cooperative Member Education and Registration

Potential members are required to undergo Cooperative Member Education (CME). The purpose of CME is to acquaint the members with the cooperative concept and the legal and operational requirements of the cooperative.

Under the guidance of an advisor, the prospective members should draft the cooperative by-laws which state how the cooperative will conduct its activities in pursuit of its declared purpose.

After the training and the group has decided to be registered as a cooperative, they may submit an application together with an application fee as prescribed in cooperative regulations and the following documents;

  • Three copies of proposed By-laws
  • Report of feasibility study
  • Business plan
  • Proof of at-least a minimum number of required members having bought shares
  • Securing financing for the Cooperative

Cooperative businesses vary greatly in the amount of capital they need to get up and running. The business plan should include the amount and type of financing needed by the cooperative and a strategy for obtaining it.

All cooperatives require member financing, usually in the form of share purchases or entrance fees. This ensures ownership in vested in the members.

Member financing not only provides equity for the cooperative, it also provides a financial base that helps other investors, particularly banks, feel more secure in investing in the cooperative.

Recruitment of more members

It is essential that the cooperative embark on outreach initiatives aimed at recruiting more membersinto the cooperative. To avoid breakdown in communication, incompatibility of goals among cooperative members, only recruit members with common needs.

Starting the Cooperative business

The Directors (Cooperative Leaders) must acquire the necessary facilities for business operations.

It is important to note that forming a cooperative is not a guarantee for success. Cooperatives are subject to the same marketplace demands and planning requirements as any business, including careful market analysis; sound business planning; competent management; and adequate capital to start-up and grow.

A cooperative must not only meet its members’ needs, but also survive in the marketplace while doing

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2024-04-17 03:40

Contact us

Ministry of Trade and Industry,

P/O Box 30366,

Capital City,

Lilongwe 3,

Malawi.

Tel:+2651770244

Fax:+2651770680

Email: trademin@trade.gov.mw