Assessment of Capital Formation Strategies in Agricultural Cooperative Societies in Katsina State

Capital formation is a foundational challenge for agricultural cooperatives in northern Nigeria, where limited member wealth and poor access to external funding constrain the cooperative's ability to provide meaningful agricultural services. This study assessed capital formation strategies and their effectiveness in agricultural cooperative societies in Katsina State, North West Nigeria. A cross-sectional descriptive survey was conducted among 165 members and leaders of eighteen agricultural cooperatives in Katsina, Daura, and Funtua LGAs. Structured questionnaires examined savings mobilisation, borrowing from financial institutions, government grant access, and member share purchase behaviour. Results showed that member share contributions were the dominant capital formation strategy for 86.1 percent of cooperatives. Government grants had been received by only 17.8 percent, and institutional borrowing was reported by 24.4 percent. Mean cooperative share capital per society was 1.24 million naira, which was considered insufficient by 71.5 percent of leaders for delivering adequate agricultural input loans to members. Education level and income were significant positive predictors of share purchase regularity. The study concludes that agricultural cooperatives in Katsina State are severely undercapitalised due to dependence on narrow member savings and limited external funding access. Recommendations include a state cooperative revolving fund, facilitation of cooperative bank borrowing through government guarantees, and mandatory progressive share accumulation schedules in cooperative byelaws.

Keywords: capital formation, agricultural cooperatives, Katsina State, share capital, North West Nigeria