The staff of Kander Manufacturing Company Limited formed a cooperative society to enable them to have access to funds. (a) Name the type of cooperative soci...

Answer Details

(a) The type of cooperative society formed by the staff of Kander Manufacturing Company Limited is a Credit Cooperative Society or Credit Union.

(b) Four features of a cooperative society are:

• Voluntary membership: Members of a cooperative society join on a voluntary basis, and there are no restrictions on membership based on race, religion, or social status.
• Democratic control: The cooperative society is managed by the members themselves through elected representatives, and decisions are made through a democratic process.
• Limited liability: The liability of members is limited to the amount they have invested in the cooperative society.
• Distribution of surplus: The surplus generated by the cooperative society is distributed among the members in proportion to their participation in the society.

(c) Three advantages of a cooperative society are:

• Access to funds: Members of a credit cooperative society can access funds for their personal and business needs at a lower interest rate than what commercial banks offer.
• Financial stability: Members of a cooperative society can save money and invest in the society, which in turn can provide financial stability for themselves and the society.
• Democratic control: Members have a say in the management of the society, which promotes transparency, accountability and good governance.

Two disadvantages of a cooperative society are:

• Limited resources: Since a cooperative society is a small organization, it may have limited resources to offer loans and other services to its members.
• Limited scope of services: A cooperative society may not be able to offer the same range of financial products and services as a commercial bank.