A very simple definition would be to say it is a business where a group of people get together voluntary to obtain a product or service. From this one can see that the members must do business with the co-operative.

For example the co-operative could buy in bulk the inputs the members need to produce a certain product (e.g. flour to bake bread and cakes). The members then produce the product and the co-operative market sells it on their behalf (e.g. the bread and cakes are sold to the public by the co-operative).

A co-operative is a distinct form of enterprise that provides services and/or products to its members. Profits, known as surpluses in a co-operative, are divided among members in relation to the amount of the business each member did with the co-operative.

Characteristics of a co-operative

  • Association of persons
  • Voluntary basis
  • Mutual or common economic, social and cultural needs
  • Jointly owned and democratically controlled enterprise
  • Co-operative principles

The principles of a co-operative

  • Democratic member control
  • Voluntary and open membership
  • Autonomy and independence
  • Educational training and information
  • Co-operation among co-operatives
  • Concern for community
  • Member economic participation

The benefits of a co-operative

  • Achieve what one cannot achieve on his/her own
  • Provide easy access to needed services
  • Pay less for inputs, marketing, distribution and selling of produce
  • Process products if necessary

Courtesy: CIPC

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