Can a Cooperative Society in Nigeria Invest in Treasury Bills, Bonds, and Shares to Grow Members' Savings?

Yes, a cooperative society in Nigeria can potentially invest members’ funds, but the most important thing is to first check the cooperative’s registration, bye-laws, governing rules, and the applicable regulatory requirements before putting members’ money into investments.

For a cooperative, I would not approach investment the same way I would approach my personal portfolio. The first priority should be capital preservation, liquidity and proper accountability, before chasing high returns.

For example, if 50 members contribute ₦20,000 each every month, the cooperative receives ₦1 million monthly. Instead of leaving all the money idle, the society could establish an investment policy that determines how much should remain liquid and how much can be invested.

A simple example could be:

• 40% in relatively liquid, lower-risk investments such as money-market instruments
• 30% in Treasury Bills or other high-quality government securities, depending on available tenors and rates
• 20% in longer-term fixed-income investments such as suitable FGN or high-quality corporate bonds
• 10% maximum in diversified equities, if the cooperative’s rules and risk tolerance permit it

These percentages are only an illustration, not a universal formula. The cooperative should consider its withdrawal obligations, members’ loan needs, investment horizon and risk tolerance.

For instance, if the cooperative has ₦10 million available and invests ₦3 million in a Treasury Bill, ₦3 million in other fixed-income instruments, keeps ₦3 million relatively liquid and puts ₦1 million into diversified shares, a fall in the stock market would not put the entire ₦10 million at risk.

The cooperative should also avoid putting all members’ money into one person’s personal investment account. There should be proper institutional ownership, documented approvals, multiple signatories, investment records, periodic statements and independent reconciliation.

On the second question about a registered business name, I would be more careful. A business name/sole proprietorship is not the same legal structure as a limited liability company. In many situations, a sole proprietor and the business are not separate legal persons in the same way a company incorporated under the Companies and Allied Matters Act is.

So before buying securities in the business name, I would confirm with the specific broker, fund manager, issuing platform and, where necessary, a lawyer or accountant, what account structure and documentation they require for a registered business name.

For example, if I operate “ABC Trading Enterprise” as a registered business name and want to invest ₦5 million, I shouldn’t simply assume that because I have a CAC business-name certificate, every investment platform will open a securities account exactly in that name.

I would first ask the regulated investment operator:

“Can you open and maintain an investment/securities account for a registered business name/sole proprietorship, and what documents do you require?”

The same principle applies to Treasury Bills, FGN Bonds, corporate bonds and shares. The actual purchasing route, custody arrangement, tax treatment and documentation can differ depending on the security and the type of investor.

For a cooperative, I would also recommend having at least these five things in writing:

1. Investment policy: what the cooperative is allowed to invest in and the maximum exposure to each asset.
2. Approval process: who can approve an investment and what level of member/board approval is required.
3. Signatories and custody: no single person should have unrestricted control over members’ funds.
4. Investment register: record every contribution, investment, maturity date, interest/dividend received, fees and current value.
5. Reporting: members should receive regular reports showing where their money is invested and how much the investments have earned.

The biggest mistake would be choosing an investment simply because someone says, “This one gives 20% guaranteed.”

For members’ money, “safe” and “profitable” must be balanced with liquidity, regulation and transparency.

Before committing funds, I would verify that the investment operator is properly licensed for the service being offered and understand exactly where the money is going.

In short, yes, cooperative funds can be structured for investment, but the cooperative should treat the money as other people’s money, not as personal cash. Proper governance and documentation are just as important as the investment return.