Monday, April 5, 2010

Sri Lanka Co-operative Insurance gets BB rating from RAM


Dec 22, 2008 (LBO) - RAM Ratings has assigned a claims-paying ability rating of BB to Sri Lanka's Co-operative Insurance Company Limited (CICL) with a stable outlook.

It said in a statement the rating takes into account the company’s "moderate competitive position" and underwriting standards.

"However, the rating is pressured by hefty overheads, inadequate reserving and regular dividend requirements of its shareholders."

RAM Ratings noted that CICL's inadequate reserving tends to "buoy profits".

In addition, the company has been declaring high dividends since the 2006 financial year to "appease" its shareholders, the rating agency said.

"CICL’s average dividend payout ratio over the past two years stood at a high 86.94 percent, further constraining internal capital generation and thus the company’s capacity to absorb risks," the statement said.

"RAM Ratings views this negatively."

Established in 1999, CICL is a relatively new player providing both life and general insurance.

Being a co-operative establishment has enabled the company to leverage on the distribution network of other co-operative societies, RAM said.

Even though the company has a very small composite market share of 0.75 percent of industry premiums, it had established 35 branches and 45 service centres by July 2008.

"This is considered a very broad coverage for a small player and has enabled the company to grow above industry levels over the past three years," RAM Ratings said.

"Even though the company does not aspire to become a large player, it is able to shield itself from competition, by virtue of its 'co-operative' status and access to a distribution infrastructure that other players do not have."

Nonetheless, RAM Ratings said it believes the company’s premiums are still inadequate to cover its escalating operational expenditure.

"Due to its rural focus and ability to access these segments through tie-ups with other co-operatives, the company has been able to exercise selective underwriting and maintain pricing discipline while garnering a diversified retail portfolio."

This, together with its stringent claims assessment, has enabled the company to maintain a claims ratio of around 50 percent, compared to the industry’s 60 percent, RAM Ratings said.

"Furthermore, it has been able to maintain its lapse ratio better than the industry average." However, the rating agency said, the company’s financial performance is deemed weak as its expense ratio has remained high at around 60 percent over the past three years.

"The expense ratio rose due to inflation, the company’s expansion drive and the resultant increase in head count."

But the rating agency said the company has been able to make profits due to investment income, the bulk of which stemmed from government securities.

"Apart from high overheads, the company’s general insurance reserving levels are deemed inadequate," RAM Ratings said.

CICL's ratio of technical reserves to net premium came in at a low 62.06 percent as at the December 2007 financial year and had been weakening over the past three years.

"Further, RAM Ratings has observed that the company does not reserve for unexpired or contingent risks, rendering its underwriting results fragile," the statement said.

Who We Are

We are a public Limited Liability Company incorporated under the companies act No 17 of 1982. We are also an authorized Insurer to underwrite composite Insurance Business, and although small, have been developing our portfolios steadily and strongly.
We apply the cooperative principle in our dealings with our policyholders and the general public and are striving most emphatically, to be a model business enterprise in every sense of the word.

Our Vision Looking into new horizons

To be an organization that will stand united with its customers to the very end.

Our Mission - Making a pioneer in mutuality

To be ever mindful of the needs of our customers and, thereby make ‘true protection’ a way of life via the provision of innovative, yet affordable insurance solutions which conform to the highest ethical and moral standards

Cooperative Insurance Co. won the Platinum Award for Excellent Leadership at the Business Initiative Direction (BID) Quality Summit 2009 held at Paris in March 2009

Cooperative insurance wins top TQM award

Cooperative Insurance Co. won the Gold Award for Excellence and Business Prestige at the Business Initiative Direction (BID) Quality Summit 2008 held at New York in May 2008


2).“Cooperative insurance wins top Leadership award“

Cooperative Insurance Co. won the Platinum Award for Excellent Leadership at the Business Initiative Direction (BID) Quality Summit 2009 held at Paris in March 2009

Co-operative Insurance Company Ltd.
"Co-op House"
3rd Floor, No. 455, Galle Road , Colombo 3, Sri Lanka.
Tel : 94 -1-2556567 - 70 Fax : 94 -1- 2556760
E-mail : info@coopinsu.com

The International Cooperative and Mutual Insurance Federation

A Global Reach for Local Strength

The International Cooperative and Mutual Insurance Federation (ICMIF) is a long established and unique global organisation representing cooperative and mutual insurers from around the world.

The important and common bond uniting ICMIF members is that they place the interest of policyholders/members before those of shareholders, working hard to ensure that they offer the best possible range of affordable products for their customers.

Continually seeking to broaden the scope of member representation has resulted in many new members joining ICMIF, thereby increasing the networking and leverage that ICMIF has in the global financial services market.

ICMIF aims to promote and work with the cooperative and mutual insurance sector globally by being a leader in providing information and services to members, and representing the interests of, the global cooperative and mutual insurance sector.

Working together with the members in this way underpins the Federation’s commitment to providing “a global reach for local strength”.

Established in 1922

Initially established in 1922 as the Insurance Committee of the International Cooperative Alliance (ICA) with a view to strengthening collaboration amongst cooperative and mutual insurers, ICMIF has grown over the years, significantly changing direction in 1972.

In that year ICMIF formed an independent Secretariat, simultaneously moving away from the ICA. A further strategic review of operations was undertaken by members in 1992 at which time the organisation was significantly restructured in order to align itself more closely with the changing needs of its members, with a focus on delivering business-related services.

Following the appointment of the current Chief Executive, Shaun Tarbuck, the activities of the Federation were again reviewed as a result of which a new six-point strategy has been implemented geared to delivering the Federation’s services to the members.

With just five member cooperative insurers when it was formed, today’s ICMIF has grown hugely, with significant numbers of new members joining in recent years. By 1993, when the present Secretariat was established, 75 organisations were members from 45 countries.

212 members

By 2009 this number has risen to 212 members with approximately one-third of the membership in Europe, a further third in the Americas and the remainder representing Asia and Oceania, Africa and the Middle East.

This individual membership in turn represents over 600 distinct insurance organisations with assets approaching USD 1 trillion. Spread across more than 70 countries, these organisations employ over 300,000 people.

A further 1,500 mutual insurers are indirect members of ICMIF through their national mutual trade associations. ICMIF can truly claim to be the voice of the world’s cooperative and mutual insurance sector.

ICMIF membership growth
Members by region
Members by legal status

Stock Companies and other organisations can be eligible for membership provided that the stock is predominantly owned by popularly-based organisations such as cooperatives or trade unions. Membership is focused on how an organisation operates for the benefit of its insureds and how it embraces the mutual and cooperative values rather than its legal definition—which can often be dictated by the fact that there are no cooperative or mutual insurance laws in their country.


For further information contact John Gully

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Is Microcredit a Debt Trap?

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According to India's National Crime Records Bureau, more than 87,000 farmers committed suicide between 2002 and 2006 because of failing harvests and huge debts. A 2004 article in The Lancet, a renowned British medical journal, found that young women in South India had the highest suicide rate in the world.


Sudhirendar Sharma, a former World Bank analyst and now director of the Delhi-based Ecological Foundation, thinks that microfinance is part of the problem. The rural suicides, he wrote, "cast a dark shadow on the fledging microfinance sector."


Sharma complains that usurious interest rates of up to 40 percent and forced loan recovery practices were intimidating the poor. This and other incidents have led to mounting criticism of microcredit as a debt trap for the poor.


Suvarna Gandham, manager of Indian operations for the Oikocredit microfinance fund, says that microfinance is not to blame for the suicides. She says many of those driven to suicide had outstanding debts with commercial banks and moneylenders; not microfinance institutions (MFIs). Moreover, Gandham believes the high suicide rates are a symptom of India's massive economic transformation.

Top Microlenders

"In many transition countries, the suicide rate has shot up because many people were not able to adjust to a changing economy," she says. For India's farmers, the situation had been worsened by a drought.

Gandham argues that microfinance helps to avoid the debt trap by giving poor people an alternative to local moneylenders, who are known to charge interest rates of up to 1,000 percent.

No jobs, no development?

Economists who have looked at how microfinance impacts national economic growth have not yet been impressed by microcredit. Aneel Karnani, a professor at the University of Michigan's Ross School of Business, argues that microcredit does not increase the number of people with jobs or the gross domestic product of a country.

Karnani devised a simple thought experiment to illustrate his criticism. In one scenario, a lender gives out 200 dollars to each of 500 women so that each can buy a sewing machine and set up their own sewing microenterprises. In the alternative scenario, a traditional financier lends 100,000 dollars to a single entrepreneur who sets up a garment manufacturing business that employs 500 people.

In the first case, the women must make enough money to pay off their usually high-interest loans while competing with each other in exactly the same market niche. The garment manufacturer, however can exploit economies of scale and use modern techniques.

"The biggest problem with microcredit is that people who get these small loans usually start or expand a very simple business," Karnani concludes. "We need to create more jobs, and microcredit does not help to do that yet."

Surprisingly, Suvarna Gandham agrees. "What can you expect if you give a 70-dollar loan for one year to a person? What magic can you expect from him? At the most, he can survive, and there can be small changes in his quality of life."

Microfinance, she says, is consolidating the subsistence level of poor people. The question is whether this is considered a gain. For Gandham, the equation is simple: "They will be able to eat two meals and slightly improve their quality of life." That alone, she says, is worth the effort.


Reasonably high interest rates?

Many people who embrace microfinance are still shocked by the double-digit interest rates that MFIs charge their poor clients. Y. S. Rajasekhara Reddy, chief minister of the Indian state of Andhra Pradesh, complained that some MFIs were "worse than moneylenders" because they charged interest rates over 20 percent.

But Suvarna Gandham argues that a "reasonable" interest rate has to cover costs of both the finance and distribution of the loans. Delivering money to villages can be costly, which she says justifies interest rates of 20 to 25 percent for the final borrower. Trying to cut on these delivery costs would mean paying MFI employees less what they typically earn, around 100 dollars per month.

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Critics say that many poor people do not have the financial knowledge or experience to use debt to increase their wealth. Instead of using microloans to invest in the business, many poor clients use them for a wedding, a festival, or to buy something.

"Even people in rich countries often don't know how to use debt," says Aneel Karnani. "They think that once you have a credit card, you can buy anything. If you get microloans, it doesn't necessarily mean you can buy things you couldn't afford before."

Sometimes, however, there are situations when taking loans is inevitable for poor people, says Ralf Radermacher of the Delhi-based Microinsurance Academy. According to Radermacher, the main reason for loan default is illness or death of a family member.

"I think in such emergency situation people are particularly vulnerable and need to take loans, even to unfavorable conditions," says Radermacher. "This can result in a debt trap." Microinsurance, he argues, could offer some potential protection here.

Another problem with microfinance that even proponents acknowledge is its rapid growth. More and more institutions are catering for the same regional markets, sometimes leading to fierce competition.

"MFI One has given a loan to Lady X and MFI Two will also try to give her a loan," says Gandham. "That is what we call multiple loans, and that is what can trigger some problems."

But Gadham insists that both sides would learn very quickly, because defaulting is neither in the interest of the creditor nor the debtor.

editor: Thilo Kunzemann

publishing date: April 22, 2008

The story of Pimpalgaon Wagha

Watershed development is getting increased attention in the semi-arid regions of India. However, the approaches applied are often rather technology oriented and controlled by NGOs and the Government. The participatory approach as developed by Social Centre and experimented with in Pimpalgaon Wagha holds many important lessons.

Pimpalgaon Wagha is a small village covering an area of 840 ha in the Ahmednagar district of the state of Maharashtra. It is located at the foot of barren and rocky hills in the rain shadow area of the Western Ghats. The village experiences two major seasons: summer (March-June) and winter (October-February). The temperature varies between 28°C and 12°C in winter to 39°C and 23°C in summer. With an average annual rainfall of 511 mm, most of which falls within a span of a few days, Pimpalgaon Wagha has been experiencing severe droughts for many years.

The landscape is marked by heavy soil erosion. The highly eroded stony soil is largely unfit for cultivation, but for the lack of alternatives, the people of Pimpalgaon Wagha continue to grow crops. The main crops grown in summer and monsoons are millet, pigeon pea, lentils, gram and kidney beans, while sunflower, safflower and sorghum are grown in winter. Where seasonal irrigation is still possible, vegetables, onions and groundnuts are grown.

Pimpalgaon Wagha has 879 inhabitants, 27% of the families belong to backward caste, they live at the border of the village. A socio-economic study conducted in early 1988 revealed a very grim picture. Because of recurrent drought and the resulting poor economic condition, the 879 inhabitants often experienced hunger and were prone to many diseases.

Sixty percent of the people depended on agriculture for their subsistence and the 11 landless families had other occupations, like hair-cutting, cobblery, carpentry. Most people from the village had to go out as agricultural labourers, but this income was barely enough for subsistence and that too not on a regular basis. People either migrated to urban areas in search of jobs or took debts from moneylenders and landlords and to pay them back often worked as bonded labourers.

The women were the worst affected. Drinking water was not available within the village and they had to walk for miles to get water and fuelwood. More often than not, this task was given to young girls, who had to leave school to help in household chores and were, as a result, deprived of education.

In 1988 Social Centre, a voluntary agency which has been working in the district for two decades, decided to work in the village because of its poor condition. When Social Centre approached the village, the people expressed a desire to start a dairy co-operative as they had seen one in a neighbouring village. Social Centre helped them in this endeavour and also helped them obtain loans to buy better cattle. Thus a relationship of trust was established.

Watershed management

In 1989 Social Centre decided to introduce watershed development in Pimpalgaon Wagha. Some villagers were taken on an exposure visit to Adgaon and Ralegan Siddhi, where experiments of participatory watershed development had been successful. The villagers were very impressed and enthused. They saw the benefits of watershed development and decided to try out the same in their village.

The conditions laid down for successful implementation of watershed development were quite rigid and demanded a change in the prevailing lifestyle of village community. But the now-motivated people readily accepted the conditions.

Watershed development involves the complete participation of the affected people, where they are responsible for the planning, implementation and monitoring of the project. This was a new experience for the people, because hitherto developmental projects were implemented by the Government and the opinions of the affected people was hardly solicited.

The people of Pimpalgaon Wagha formed a Village Watershed Committee (VWC) to oversee the activities involved developing their watershed. This body was nominated from among the villagers and was representative of all communities and geographical regions within the village. This was again a novel experience as the backward communities who had never really been part of the village affairs now had fair representation on this decision-making body. As the VWC had been unanimously nominated by the villagers, the better-off farmers lobby could not dominate it.

A ban was imposed on free grazing and free felling. The villagers decided to levy a fine on defaulters. The villagers also sold off their scrub cattle and replaced them by good quality hybrid cattle. Goats were sold off, as a result of which children who otherwise had to tend them could go to school. The villagers then decided to take up measures to conserve soil and water.

Social Centre gave them support for technical surveys and other managerial assistance. A nursery was set up by a small farmer. Treatment measures like contour trenching, contour bunding, gully plugging, construction of check dams and percolation tanks were taken up. The villagers contributed free labour on the basis of two man-days per month per family or two days wages in lieu of labour. Women also contributed free labour for tree plantation activities.

The villagers were trained to carry out tasks like surveying and levelling. The activities were monitored by a supervisor who was also from the village. The result was that the people began to feel responsible for the project and so worked hard to make it a success.

Post-watershed impacts Social

The backward communities were previously isolated from the village. They were not consulted on any matters pertaining to the village. They were considered as social outcasts. The watershed movement brought about a change in this attitude of the people of Pimpalgaon Wagha. Social taboos have been lifted and these people are now allowed freely in the village. The backward communities have a fair representation on the VWC and participate actively in the decision-making process.

Once the financial condition improved, the people from these communities also began to get respect from the other villagers. Injustice by landlords and moneylenders also greatly reduced. People became less dependent on them as they became aware of government schemes and loans. The income earned from the work on watershed sites helped them pay off their loans.

As more children could go to school, literacy in the village improved and today the literacy rate is about 80%. Biogas plants were set up in some households in the village and their fuelwood consumption declined. As drinking water had become available within the village, the women did not have to go far for water and so could contribute more positively to the development of the village. They set up a revolving credit and made loans available to the needy at the low interest rate of 2%.

Economic

The soil and water conservation measures increased the water levels in the village wells and water was available for about 11 months in the year. Before watershed development was introduced in Pimpalgaon Wagha, only 40 of the 75 wells had water and that too for just 8 months. As a result, the farmers could irrigate their fields and agricultural productivity increased by nearly 50%.

Horticulture was introduced in the village on wastelands and private farmlands bringing more land (33 ha) under productive use. Eleven ha is under dryland horticulture, while the remaining 22 ha under mango, chickoo, orange and tangerine cultivation is irrigated. The dairy co-operative is running successfully and milk production has also gone up to 1200 litres per day. As more opportunities for employment have become available within the village, the migration to urban areas and other agricultural wage labours has stopped. In fact, some families who had earlier left the village have now returned.

Natural resources

Positive impacts on natural resources are also observed. The once rocky hillsides around Pimpalgaon Wagha are now covered with grasses and shrubs, as a result of the ban on free grazing and free felling. In spite of the drought situation, nearly 80% survival rate is seen in the 200,000 saplings planted by the people.

Soil erosion had declined considerably and grasses are growing along the waterways. Streams which would flow only up to November now flow up to January even in a dry year. Drinking water is available even in the dry years. This year, for example, the monsoons did not arrive in Pimpalgaon Wagha till September, but the people had drinking water, and could also irrigate their horticulture plots.

Lessons learnt

The experiment of Pimpalgaon Wagha shows that it is possible for people to unite and work together to develop themselves, at the same time expressing their creative potential and wisdom. About the way how to enhance such a process many important lessons have been learned, for example:

Watershed development is possible only when the creative potential of the people is awakened, mobilised and organised in such a way that they constitute themselves into a self-help group oriented towards rejuvenating and managing their "space of survival" to the long-term benefit of all.

The role of an NGO is only one of catalyst and advocate. It’s job is to mobilise the latent power of the people, to accompany them and to empower them by putting them in contact with existing development institutions and by also upgrading their skills in the various aspects of project management, maintenance of works and enhancing of the productive potential of created assets. The NGO should not substitute the people’s own initiative and responsibility.

The imposition of "outside" ideas of equity may well prove counter productive in terms of good will of people who do not perceive it as just and fair within their particular socio-eco-cultural situation, thus leading to group resentment.

All work plans, implementation and decisions concerning the same should be made by the people and the NGO together, with weight being given to the former. Moreover the project should be implemented in such a manner that the beneficial traditional, cultural and institutional mechanisms are not only eroded by the introduction of exogenous management systems into the village but are in the process to be strengthened and made effective.

Whenever possible, all relevant major GO and NGO development institutions should be involved in such a project. This might well provide the possibility to reorient such actors in a way that people’s priorities and demands set the agenda rather than institutional and administrative compulsions.

Selection of the village has to be done very carefully. Those villages in which people have a tradition of intra village conflict management and decision making based on consensus in matters that affect the village as a whole offer a promising basis for success.

Participatory development is largely a question of people management and personal relationships. Therefore having the right kind of staff is crucial to the success of such projects. Only s/he will succeed who is perceived by the people as sincere, committed and having their best interest at heart.

Furthermore, if one is to empower the people and evolve a people’s programme, it is important that these same people also have access to project finance - how much and how it is spent. The people cannot be mere beneficiaries of largesse or mere wage labour with the NGO being contractor or master. Mechanisms should be evolved wherein people are not only enabled to make their own active contribution but also have a say in the disbursement of project funds. The project must be accountable to the people!

Today, Pimpalgaon Wagha acts as a role model for other village communities that wish to help themselves and better their conditions. The people of Pimpalgaon Wagha have even decided to adopt another village community in their vicinity and introduce it to watershed development, thus giving an impetus to a watershed movement.

Crispino Lobo, Programme Co-ordinator, Watershed Organisation Trust, 2nd Floor, Suryamangal Niwas, Market Yard Road, Ahmednagar 414 001, India.
ILEIA Newsletter Vol. 11 No. 4 p.

Further reading - Lobo C. & Kochendorfer-Lucius G, 1992. The rain decided to help us. Pimpalgaon Wagha: an experience in participatory watershed development in Maharashtra State, India. GTZ, Bonn.

- Pangara G. & Pangara V, 1992. From poverty to plenty: The story of Ralegan Siddhi. Studies in ecology and sustainable development No. 5. INTACH, 71, Lodi Estate, New Delhi- 110 003, India.

The Sangh Parivar includes the following organisations (1998 membership figures in brackets):

Co-ops & Human Sustainable Development: Asia/Pacific

 This document has been made available in electronic format
      by the International Co-operative Alliance ICA
     CO-OPERATIVES AND SUSTAINABLE HUMAN DEVELOPMENT
                    REGIONAL PERSPECTIVE
                 ASIA AND THE PACIFIC  
A look at the global spread of co-operatives will reveal a huge
and rich spectrum. Co-operatives exist in a variety of sectors,
e.g., agriculture, irrigation, food processing, handicraft,
weaving, metal work, printing, health, educational trusts, banks,
water supply, recreation, arts and crafts, tourism and consumer
co-operatives.  
Co-operatives have been able to provide a variety of social
services to their members besides providing opportunities of
employment and additional income-generation.  Some of the social
aspects of co-operatives have been the following: 
     - Employment generation
     - Formal and non-formal education
     - Vocational training
     - Medical and health care services
     - Environment protection activities
     - Drinking water supply
     - House construction
     - Fine arts and sports
     - Legal aid and consultancy services
     - Consumer education - consumer protection
     - Rural welfare programmes
     - Rural communities
 
Co-operative institutions in the Asia Pacific Region (covered by
the International Co-operative Alliance Regional Office for Asia
and the Pacific) have provided services to their members in
poverty alleviation, social integration and employment
generation.  For example social services rendered by sugar
co-operatives and milk co-operatives in India, agricultural and
consumer co-operatives in Japan (in the sector of encouraging
women to participate in co-operative activities through their own
Han groups and associations , health programmes etc.),
handicrafts, industrial co-operatives in China and women
associations in India, Sri Lanka and Indonesia.
 
The level of co-operative development in the region presents an
interesting study; while there are rich, well-knit, enlightened
and well-managed co-operative institutions in countries like
Japan, there have been instances where co-operatives are still
struggling to find their own level e.g., in Bangladesh and
Pakistan.  In countries like India, where co-operatives have been
on the scene for over 100 years, they have lost contact with
their members, owing to excessive government protection and
interference. The level of member participation is weak and the
management of co-operatives has slipped out of members' control
because of the close control exerted on the management and
financing of these co-operatives by the Government.
 
There are several reasons for the lack of member participation:
 
     - Strong legislative influence by the government
     - Excessive participation in capital by governments
     - Management control by governments
     - Top heavy planning
     - Lack of general education among members
     - Inadequate educational and training opportunities
     - Overpopulation
     - Inherent lower level of economic development
 
A majority of these drawbacks can be removed by appropriate
planning and with the co-operation of enlightened co-operatives
and government organisations. A special effort has to be made to
educate the members - not only in the techniques of running a
co-operative institution, but also in appreciating the importance
of literacy, and to training board members and employees of
co-operatives so that they are able to take decisions and
implement them to the entire satisfaction of members - the owners
of co-operatives. Greater educational and training opportunities
also empower the members to manage their institutions properly
and to insulate them from external influences.
 
It has often been found that those co-operatives providing funds
and opportunities for the education and training of their
members, board members and employees have shown greater
independence of action and  better economic results. Such
institutions consider the education of members as a sound
investment. 
 
Human resource development can contribute significantly to the
eradication of  poverty. Governments which have invested in human
resource development e.g., health, education and the provision
of basic amenities, have been able to enhance the living
standards of their people.  Poverty in the Asia Pacific Region
has been caught in a vicious circle of population and economic
development. Which of these issues should be addressed first is
an ongoing dilemma for planners.  Governments have inadequate
resources. External financial and other assistance is limited and 
often linked with the priorities of the donor agencies which are
often in conflict with Governmental priorities. 
 
Non-government agencies dealing with programmes related to the
alleviation of poverty also have limitations resources and often
tend to target only a small segment of the population and, as a
result, their efforts are frustrated over a period of time. NGOs
which like co-operatives have a direct link with the community 
can have a positive effect, provided that their members or the
local people have the possibility and ability to take decisions
on the issues having an impact on their daily lives.
 
Co-operatives, as institutions of the people, can thus be
effectively used by the state to improve the economic conditions
of the people. They can be used to undertake programmes which
target a large number of people including a combination of women,
men, children, young and old as well as of farmers, consumers and
industrial workers. 
Co-operatives can be involved in the following sectors: 
-    Health, education programmes (relating to childcare, AIDS,
balanced food, general health checks, nutrition). Good health
means good level of education, more active life for the
industrial worker, a better work environment for women and raised
consciousness on safety and security. Co-operatives can also
provide services for the care of the aged. 
-    Education and training (essential skills of literacy and
numeracy , as well as practical problem-solving not only for the
co-operative members, but also for the staff of other agencies
and institutions. Investment in education contributes to economic
development by increasing labour productivity, higher
agricultural production and the provision of better consumer
goods). The education of women is a particularly strategic
investment in human resources, carrying very high social returns.
Educated mothers have lower infant and child mortality rates and
are aware of birth control methods. They  educate their children
better and marry later. 
-    Employment generation (through the diversification of
activities and choosing products with  higher economic returns
to the producers e.g., value-addition through agro-processing,
etc.) Such programmes also help reverse the trend from the
village to the town. In countries like China and India, with
highly agricultural oriented economies, a large number of people
- including youth and women - are involved in agriculture-related
activities. 
-    Co-operatives could become the  focal points for the
dissemination of information to the community. By networking 
with parallel institutions, centralised institutions and members
and providing a better access to market information,
co-operatives can provide greater business opportunities to their
members. 
Co-operative institutions are a vital component of civil society
with strong ties to local communities They form a particularly
important vehicle for the development of the marginalised
sections of the society. However, they suffer from a chronic lack
of both financial and human resources. Their effectiveness can
be substantially enhanced through personnel training, the
exchange of experiences with counterparts in other countries, and
access to regional and international information sources in their
fields of interest.

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