Factors Influencing Formation and Development of Small Co-operatives

Abstract

This study sought to determine factors which small co-operative entrepreneurs had to consider in the process of establishing their businesses. In particular, the study aimed at establishing whether or not these factors were critical for establishing viable and sustainable co-operative business enterprises in Tanzania. In the course of pursuing the above objectives, the study also identified barriers to business success in the study area which could provide lessons to other co-operative enterprises elsewhere. Consequently, the researcher investigated the availability and effectiveness of support services which were necessary for the promotion and formation of viable and sustainable small cooperative business enterprises. The study area was Dodoma Municipality. Two main hypotheses were behind this study: • The formation of small co-operative business enterprises in Tanzania was strongly influenced by the social, economic and policy factors at the levels of enterprises and Government; and • The viability assessment was not taken seriously at the initial stage of the establishment of small co-operative business enterprises. The data was obtained mainly through a field survey and documentary reviews. The survey was undertaken during March, April and May 1997 in Dodoma Municipality. The survey involved personal interviews — interviewing sampled members of co-operative organisations (both ordinary members and members of managing committees). Also, government officials in the departments responsible for the promotion of small business enterprises as well as officials from support institutions (especially financial institutions) were interviewed.