Co-operative Development: Co-operatives as a Tool for Poverty Reduction and Promoting Business in Tanzania

Project Details

Description

A co-operative is an inclusive business model suited to the needs of small-size entrepreneurs within the agricultural, food or other sectors, typically common in rural communities. It offers a different organizational profit (commonly referred to as surpluses) business form than the investor-oriented firms or the joint-stock companies (corporations), common in many parts of the industrialized world. Co-operatives are a way people in developing countries may do ethical business as co-operatives focus on people rather than capital. They are unique model and different from other forms of businesses. They bind people together through a common purpose and they create wealth, but must be competitive and sustainable.

A co-operative offers an organizational form for making poor participatory subjects and active participants in the business activities. Cooperatives are equally appreciated and recognized in many other countries globally. In other countries of Africa such as Tanzania, Uganda, Kenya, Nigeria, and South Africa they are seen as alternative model of development to profit oriented enterprises that are seen not suitable for the poor. However, promotions of cooperatives have inherent conflicts laying in the dual nature of the organization – serving both social and economic purposes. For cooperatives to be efficient and effective, this duality has to be looked at.

The aim of the research project is to: 1. Provide policy recommendations how Finland can promote inclusive business for poverty reduction through supporting the co-operative business model to business-driven activities of poor people. How can Finland promote business with the aim to reduce poverty through supporting co-operatives? What concrete measures can be recommended in order to support co-operatives? 2. Describe the concrete examples that exist for effective, profit-driven business that improve the situation for poor people in Tanzania and identify the success factors and obstacles behind these. 3. Generate a general theoretical framework of the advantages and disadvantages in generating business activities aiming at reducing poverty in low-income countries while taking into account the relevance from the point of Finnish development policy and the Millennium Development Goals (MDGs) based on investigations of grass-root level co-operatives in Tanzania, a long-term partner country of Finland. 4. Evaluate on the basis of case studies of co-operatives in Tanzania how they have succeeded in reducing poverty, while taking into account the relevance from the point of Finnish development policy and the Millennium Development Goals. The criteria applied to evaluate the success include relevance, efficiency, development effectiveness, development impact, sustainability, management and administrative arrangements by co-operatives, aid effectiveness (effectiveness of aid manage-ment and delivery), and Finnish value-added coherence, cross cutting objectives and environment, climate change, disaster risks. 5. Evaluate which concrete examples that co-operatives have promoted the livelihoods of women, handicapped and young people as well as their participation in business life. 6. Answer whether the co-operatives do create new possibilities for the local people to participate in various business activities (innovation, services, launching of products, distributional and logistical solutions, business models and activities). 7. Investigate the contribution of co-operative enterprises development to the Millennium Development Goals (MDGs). 8. Identify measures for the possibility of co-operative enterprises to bring about changes of the mind-set of members, leaders and governments through awareness creation, training, and policy reforms. 9. Scrutinize means for capitalizing access to finance for co-operative members in view of e.g. Savings and Credit Co-operatives (SACOs) in Tanzania.
StatusFinished
Effective start/end date01/03/201331/03/2014

Funding

  • Finnish Foreign Ministry: €133,000.00

Fields of Science

  • 5203 Development Studies
  • 4111 Agronomy
  • 512 Business and Management
  • 5142 Social policy