Co-operatives are seen as one of the appropriate strategies for intervention in
eradicating poverty in rural communities. During the financial year 2007-2008 the
Department of Social Development and Special Programmes pronounced on the
availability of funds in its budget for the establishment of women’s co-operatives and
other livelihood community projects. The initiative of funding rural women’s cooperatives
was one of the interventions to address high poverty and unemployment
levels among rural women in the province. Rural women co-operatives were nonexistent
in the Mbhashe area of the Eastern Cape, as a consequence, co-operatives
were speedily formed in order to access funding for women co-operatives that was
made available by the Department of Social Development and Special Programmes.
The concern of the state initiated rural women’s co-operatives was their long-term
sustainability as they were not embedded in the principles of a co-operative as
autonomous association of persons who should voluntarily unite to meet their common
economic, cultural and social needs and aspirations through a jointly democratically
controlled enterprise. It was a top-down approach which negated inherent values of cooperation,
namely self help, self responsibility, democracy, equity and solidarity. The
aim of the study was to investigate the challenges faced by state-initiated rural women’s
co-operatives in reducing poverty in the Mbhashe Area, Eastern Cape Province.
Purposive sampling was used to select members of the co-operatives as participants.
Study had an applied goal and intrinsic was the research design. Data was collected by
means of focus group interviews and semi-structured interviews were used. The
findings indicated that there is inadequate capacity in knowledge and skills to manage
co-operatives and run a business and lack of co-operative values and principles among
co-operatives. The study concludes that lack of knowledge about business, financial
management and non adherence to co-operatives values and principles limit the ability
of co-operatives to operate independently and succeed as businesses.