Determinants of Cooperative Development in Tigray, Ethiopia: The Case of Consumer Cooperatives in Mekelle

Yemane Gebremeskel Gebrehiwet

doi:doi:10.11648/j.ebm.20261204.12

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Determinants of Cooperative Development in Tigray, Ethiopia: The Case of Consumer Cooperatives in Mekelle

Yemane Gebremeskel Gebrehiwet^*

Published in European Business & Management (Volume 12, Issue 4)

Received: 11 June 2026 Accepted: 1 July 2026 Published: 22 July 2026

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Abstract

The predominant objective of this study was to investigate determinant factors affecting consumer cooperative development: The case of consumer cooperatives in Mekelle, Tigray. In response to the objective, a descriptive research design was employed by using a mixed research approach, which comprises both quantitative and qualitative methods. Both primary and secondary sources of data were used. A sample of 334 respondents was chosen using a random sampling technique. The data were analysed using SPSS. Pearson correlation and multiple linear regression model analysis were used. The study found that the intrinsic principles of cooperatives were not effectively practiced as they should have been, hence members lost a sense of ownership in their cooperatives. The governance system of consumer cooperatives—gender diversity and the board's academic qualifications had waned. The study found that cooperatives are led without policies and strategies, which would undoubtedly impede their development. Government interventions in managerial and decision-making processes limit the autonomy of cooperatives. The intrinsic principles of cooperative variables—user-owner, user benefit, user control, and the governance variables—board commitment, board communication, board gender diversity, board qualification, and government interventions proved to be statistically significant effects on the development of consumer cooperatives. This implies that effective use of these predictors enhances the development of consumer cooperatives in the study area. The study recommends that the government should develop a cooperative policy and strategy to boost cooperative development. The board's academic qualifications and gender diversity must be considered during general assembly meetings to achieve improved performance and governance in cooperatives. The government should refrain from intervening in the decision-making and managerial concerns of the cooperatives.

Published in	European Business & Management (Volume 12, Issue 4)
DOI	10.11648/j.ebm.20261204.12
Page(s)	71-85
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2026. Published by Science Publishing Group

Keywords

Cooperatives, Consumer Cooperatives, Cooperative Development, Cooperative Members, Board of Directors

1. Introduction

People form cooperative businesses that combine members' resources, efforts, and diverse areas of skill to promote members' welfare

[4]

. Cooperatives are enterprises that are established to meet the needs of their members and embrace broad businesses, including financial services, manufacturing, transportation, health care, input and output marketing, and agriculture

[16]

. The cooperative model is a distinct set of ideas that support user-owner, user control, and user benefit principles, and are unique features of the cooperative business model. Members of the cooperative are the owners and users of the society

[5, 6]

. A cooperative is a unique business entity where members are both owners and beneficiaries of the services provided by a cooperative. These concepts are more than just common-sense guidelines and policies and distinguish them from other kinds of enterprises

[2]

. Cooperatives have resilience against volatile markets and speculative trading. They are involved in a wide range of economic activities, including banking, insurance, agriculture, handicrafts, housing, consumer services, etc

[36]

. Cooperatives raise individual income and enhance a member's way of living. They are the vehicle for economic development and sources of supplies and services

[31]

Consumer cooperatives are essential in protecting people from the clutches of middlemen and contribute a great part to the development of the nation

[32]

. They raise the well-being of their members

[25]

. They are agents of socio-economic transformation and have a decisive role in people's livelihood improvement

[20]

. They are also crucial for global economic development and help to stabilize the market by fixing market failures, neutralizing concentrated market power

[2]

. Many developing nations have encouraged the establishment of cooperatives as a way to resolve problems, including unemployment, rural development, and the creation of income-generating activities

[40]

In Ethiopia, there has been no modern and well-organized cooperative since 1964. During the reign of Haile Selassie, Cooperative Legislation No. 241/1966 was announced, and around 154 various cooperative types were established

[7]

. Under the Derg regime (1974-1991), various kinds of cooperatives were organized, regulated, and inspected by different ministries and institutions. During this period, Proclamation No. 138/70 was announced, which allowed the National Bank of Ethiopia to organize cooperatives. These cooperatives were not demand-driven and member-managed. There were fraud, embezzlement, and mismanagement

[23]

. Following the Derg regime's overthrow in 1991, the adoption of the Economic Reform Program helped the organization develop cooperatives within the framework of a free-market economy. This gave rise to the possibility of transforming cooperatives into actual people's organizations, and as a result, many more cooperatives rose in both urban and rural places

[8]

. The Federal Democratic Republic of Ethiopia (FDRE) recognized the legality of cooperatives by Cooperative Proclamation No. 147/1998. The current Cooperative Proclamation No. 985/2016, which replaced Cooperative Proclamation No. 147/1991, came into effect in December 2016 and governs cooperatives in Ethiopia. Over the past thirty years, Ethiopia's cooperative development has advanced significantly

[13]

. Cooperatives are actively involved in a wide range of social and economic sectors, including finance, consumer goods, agriculture, and input and output markets

[21]

The existence of a free-market economy and the government ‘s commitment have established suitable circumstances for the development of cooperatives in the country. With all types of cooperatives in general and consumer cooperatives in particular has advanced remarkably

[18]

. Despite the recognition of cooperatives in economic development, in Ethiopia, consumer cooperatives are faced with critical challenges such as a lack of policies and procedures that are needed to sustain operations and promote long-term viability

[35]

. They are also lagging in terms of their effectiveness and ability to generate income for members

[6]

. Numerous obstacles to cooperative development include inadequate finance, poor administration, and weak governance frameworks

[1, 3]

. A study by

[42]

confirmed that consumer cooperatives have a significant and positive role in improving the livelihoods of members in Ethiopia.

[14]

reported that there were high government interventions in cooperative autonomy in the Oromia Regional State, Ethiopia, which challenged cooperative autonomy.

In Ethiopia, a study conducted by

[15]

found that the government intervened in cooperative decisions and management. High government meddling in cooperative decisions and managerial matters discourages members from engaging in their cooperatives and causes the cooperatives to collapse. However, effective governance in cooperatives helps to enhance the development and sustainability of the cooperatives

[33]

. A more diversified board of directors boosts an organization's success because they bring diverse viewpoints and concepts

[39]

Despite studies that have been done on cooperatives, to the best of the researcher's knowledge, none have investigated the determinants of cooperative development toward consumer cooperatives in Tigray. Various researchers, such as

[19, 27]

, have studied and used variables including management factors such as planning capacity, knowledge level of management, board size, and internal control, respectively.

[17]

also conducted a study on cooperatives, considering variables like the financial viability of the organizations and the autonomy of the management committee. According to

[26]

, nowadays, some of the major obstacles affecting the consumer cooperatives in Tigray, particularly in Mekelle, include a lack of know-how and implementation of intrinsic principles of cooperatives, governance problems, and limited government emphasis on cooperatives. Such challenges and observations, as well as the significance of the cooperative role for people's economic development, have motivated the researcher to carry out the study and focus on consumer cooperatives.

Few previous studies on consumer cooperatives have largely focused on their economic advantages, including increased income and access to affordable goods. Unlike previous studies, in this study, variables such as the intrinsic principles of cooperatives—user-owner, user benefit, user control, and the governance factors—board commitment, board communication, board diversity, qualification of the board, and government intervention, are utilized to measure the consumer cooperative development.

In light of this, this study aimed to investigate determinants of consumer cooperative development in Mekelle, Tigray, which would help in developing cooperatives and provide long-term benefits to their members. The objective of this research is basically outlined in the following subsection.

Research Objectives

The objectives of this study are:

1) To assess the effect and practical application of the intrinsic cooperative principles in enhancing consumer cooperative development in the study area

2) To examine the governance factors that affect the consumer cooperative development in the study area.

3) To analyse how government intervention promotes consumer cooperative development in the study area in terms of financing, policy, and decision-making

2. Conceptual Framework of the Study

The study’s conceptual framework is established on the principle that consumer cooperative development is influenced by several factors and that if those factors are recognized, they could be employed to enhance the development of the consumer cooperatives. Hence, the variables listed below are established for this investigation. In light of this, the intrinsic cooperative principles, user-owner, user benefit, and user control are the study’s indicators for the first objective.

Furthermore, the governance factors—such as board commitment, board gender diversity, board qualification, and board communication and government intervention—are vital indicators for the second and third objectives, respectively. These variables are picked out in consideration of the problems with ground practice and the gaps, which were then discussed in the introduction, along with other studies. The study's variables are conceptualized graphically as follows.

Source: Author Sketch, 2026

Download: Download full-size image

Figure 1. Conceptual Framework of the Study.

3. Research Methodology

The Tigray region owns a total area of 54,634.24 sq. Km or 5,463,424.26 hectares, and is surrounded by two regional states and two neighbouring countries; to the east by the Afar regional state, to the north by Eritrea, to the west by Sudan, and to the south by the Amhara regional state. Tigray has seven major administrative zones, of which the study area, Mekelle, is one of these zones. The rest includes the Western zone, North-western, Central, Eastern, South-eastern, and Southern zones. Indeed, this time among the seven Tigray zones, the Western zone of Tigray is in the hands of aggressors, which covers 9 Woredas with 13,800.69 sq. Km or 1,380,068.62 hectares. Additionally, from the North-western zone of Tigray, three woredas—Laelay Tselemti, May Tsebri Town, and Tselemti—are also occupied by the aggressors, comprising 2764.2 sq. Km or 276,416.4 hectares of land

[11]

Within the seven administrative zones, there are 93 Woredas, and 687 “Tabiyas” or villages. The region had a total population of about 7,070,260 in 2020, of which 50.6 percent are females, and 80 percent are agriculturalists, contributing 46% to the regional GDP. Tigrayans are predominantly Orthodox Christians, making up 96% of the population

[12]

. According to

[30]

, Mekelle is located nearly 780 kilometers north of Addis Ababa. The city is found in Ethiopia’s temperate highlands, at an elevation of more than 2,254 meters (7,395 ft.) above sea level. Mekelle City covers an area of 32,295.31 hectares. It is the regional capital of Tigray state. The city’s typical annual temperature ranges from 14 to 34 degrees Celsius, with 575 to 650 cm of rainfall. The religious composition of the city is 93 per cent Christian, the remaining Muslim, and other various religions.

Source: Tigray Bureau of Urban Development and Construction (2026).

Download: Download full-size image

Figure 2. Map of the Study Area.

According to

[41]

, the Mekelle population is now estimated at 611,574. Administratively, Mekelle consists of seven sub-cities, namely Adi Haqi, Ayder, Hadinet, Hawelti, Kedamay Weyane, Quiha, and Semein. It is the economic, cultural, and political center of northern Ethiopia. The “three central sub-cities” of Mekelle—Kedamay Weyane, Ayder, and Hawelti—are the business hub of the city. In addition, the research area, Kedamay Weyane, has 632.3 area hectares, and the Hawelti sub-city has 1583.4 area hectares of land

[11]

. Kedamay Weyane is located in the north Semen sub-city, the west Adi Haki sub-city, and the east Enderta Woreda. The population of the study area, Kedamey Weyane sub-city, consists of a total of 74,215, of these 37,573 males and 36,642 females, and the number of households is 22,489. Furthermore, the total population of the second study area, Hawelti sub-city, is 144. 793 of these, 67,588 are male, and 77,205 are female, and the number of households is 34,559.

Data Sources

The researcher employed both qualitative and quantitative research approaches. The primary and secondary sources of data were also used. Primary data, both questionnaire and interview instruments, were employed. The primary data was gathered from members of cooperatives through questionnaires, and the interviews were also conducted with key informants. Hence, respondents gave data responses belonging to the Likert Scale questions where 1 = strongly disagree, 2 = disagree, 3 = Neutral, 4 = agree, and 5 = strongly agree

[9].

In addition to the primary data, the researcher used secondary data, which was gathered from the main office of the cooperatives. According to

[26]

, among the seven administrative zones, Mekelle has 35 consumer cooperatives, and within the two sub-cities, Kedamay Weyane and Hawelti sub-cities, there are 13 consumer cooperatives comprising a total population of 3476 members. The target population in this study is the five consumer cooperatives, which comprise 2534 members.

In this study, both random and purposive sampling methods were employed. Out of the seven administrative zones in Tigray, Mekelle was selected purposively as a study area due to the potential of the consumer cooperatives in comparison to the other administrative zones. A multi-stage sampling procedure was employed. Firstly, the Mekelle zone and the two sub-cities, Kedamay Weyane and Haweltir sub-cities, were purposively chosen for the study due to the potential of the consumer cooperatives. Secondly, there are 35 consumer cooperatives across Mekelle’s seven administrative sub-cities. Of these, within the two administrative sub-cities, Kedamay Weyane and Haweltir sub-cities, there are 13 consumer cooperatives found (Kedamay Weyane 7 and Hawelti 6), and of these, five were randomly selected. Thirdly, it was difficult to obtain the entire population due to time and financial constraints. Hence, the researcher concentrated on five consumer cooperatives and selected them at random to investigate the determinants of consumer cooperative development in the study area.

Additionally, the 334 respondents (members) of the consumer cooperatives were taken from the five targeted consumer cooperatives (which have 2534 members) using the simplified statistical formula developed by

[24]

as cited by

[28, 38]

, and obtained the sample size of the study. This formula assumed a 95% confidence level (1.96) and a margin of error € of 0.05.

The sample size of the study is determined as follows.

\frac{pq N . Z 2}{(N - 1) e 2 + Z 2 pq}

Where:

1) n = required sample size

2) Z = z value at 95% confidence level (1.96);

3) P = the population in the target population estimated to have characteristics being measured (50%); q = 100 - p =50%

4) N = target population

5) e = margin of error (0.05).

n = \frac{0.5 \times 0.5 2534 \times 1.962}{(2534 - 1) 0.052 + 1.962 0.5 \times 0.5}

Then

\frac{2433.6536}{7.2929} = 333.702 \approx 334

Table 1. Sample Distribution Across the Consumer Cooperative.

S. no	Sub-city	Name of Sample Consumer Cooperative	Population size	Own computation	Actual sample size
1	Kedamay Weyane	Addis alem	394	(394×334)/2534=52	$52$
2		Maebel kebele	320	(320×334)/2534=42	$42$
3		Hareya	372	(372×334)/2534=49	$49$
4	Hawelti	Segalu	946	(946×334)/2534=125	$125$
5	Hawelti	Meadi hizbi	502	(502×334)/2534=66	$66$
		Total	2534		334

Source: Computed From Cooperative Offices (2026).

The data were analysed by using quantitative and qualitative analysis methods. Quantitative data were analysed using the Statistical Package for Social Sciences (SPSS) software version 27, while qualitative data were analysed using narratives. Results were presented and analysed using descriptive statistics comprising tables, percentages, the mean, and the standard deviation to make them ready for interpretation. Pearson correlation and multiple regression models were also used to analyse the determinants of the consumer cooperative development.

4. Results and Discussions

This research investigates determinants of consumer cooperative development in the study area. Reliant on this perspective, consumer cooperative development was examined using the stated variables and came up with an analysis.

4.1. Assessing the Effect and Practical Application of the Intrinsic Cooperative Principles

Depending on the findings, the analysis and interpretation have been conducted based on the five Likert scale responses and mean values and Standard Deviation (SD) of the outcomes, which are presented below.

Table 2. Perception of Households on the Intrinsic Consumer Cooperative Principles in Enhancing Consumer Cooperative Development.

S. No	Variable description		Frequency						Mean	Standard Deviation (SD)
S. No	Variable description		SD	DA	N	A	SA	Total	Mean	Standard Deviation (SD)
1	Yearly auditing of our consumer cooperative helps members know and control their resources (user control)	No	58	196	17	47	16	334	2.30	1.063
1		%	17.3	58.7	5.1	14.1	4.8	100	2.30	1.063
2	In general assembly voting is conducted by members on a democratic or principle basis, “one person one vote” (user control)	No	4	26	15	237	52	334	3.92	0.784
2		%	1.2	7.8	4.4	71	15.6	100	3.92	0.784
3	Net earnings (dividends) are distributed to patrons as refunds based on share capital and members' transactions (user benefit)	No	69	177	23	56	9	334	2.28	1.056
3		%	20.7	53.0	6.8	16.8	2.7	100	2.28	1.056
4	Members of the cooperatives are the decision-makers on major issues of the cooperatives (user-owner)	No	4	58	33	221	18	334	3.57	0.880
4		%	1.2	17.4	9.9	66.2	5.3	100	3.57	0.880

Where: SD= strongly disagree, DS= disagree, N= neutral, A= agree, SA= strongly agree

Source: Field Survey (2026).

Coming up with the analysis using the Likert scale and the mean value interpretation is important in this research. Therefore, according to

[4]

, Likert scale items can be analyzed by calculating a composite score (sum or mean) from four or more Likert-type items. Hence, the mean score and its interpretation based on commonly used tools are shown in Table 3 below.

Table 3. Interpretations of Mean Score.

No.	Mean Score Range	Interpretation
1	1.00-1.80	Strongly disagree
2	1.81 - 2.60	Disagree
3	2.61 - 3.20	Neutral
4	3.21 -4.20	High /agree
5	4.21-5.00	Very/ strongly agree

Source:

[29]

To start with, the first question, the respondents requested that ''yearly auditing of the consumer cooperatives helps them to know and control their resources. Accordingly, Table 2 indicates that 196 (58.7%) of respondents disagreed with the observation, 58 (17.3%) respondents strongly disagreed, 47 (14.1%) agreed, whereas 17 (5.1%) and 16 (4.8%) of respondents were neutral and strongly agreed, respectively. The mean value and SD of this item acquired from scientific calculation are 2.30 and 1.063, respectively. The result reveals that the sample consumer cooperatives are not audited yearly, and members do not have the know-how and control over their finances. We can conclude from this that members are unclear about their resources, which results in members ' lack of user control over their resources and affects consumer cooperative development. The Key Informant Interviews (KII) confirm that cooperatives are not being audited because of a dearth of auditors, which makes members suspicious of their cooperative resources.

The respondents were also asked via questionnaires to show their level of agreement towards '' In general assembly voting is conducted by members on a democratic or principle basis “one person one vote” Hence, the result in Table 2 reveals that 237 (71%) of respondents agreed and 52 (15.6%) of respondents strongly agreed, while 26 (7.8%) of respondents disagree and 15 (4.4%) and 4 (1.2%) strongly disagree and neutral respectively. The mean value of the item is 3.92, and its SD is 0.784, which displays a high level of agreement.

The outcome reveals that cooperative elections in general assembly meetings and decision-making processes are conducted basically based on one person, one vote/ This implies that, no matter how much share capital they have invested or how much they patronize the cooperative, members have equal voting power. From this, we can deduce that members have the power to vote democratically, exercise their rights at general assembly meetings, uphold the user control principle, and help the consumer cooperative sustain development.

Further, the respondents were requested to show their level of agreement with the statement ''Net earnings (dividends) are distributed to patrons as refunds based on share capital and members transactions'' The result in Table 2 displays that 177 (53%) disagree and 69 (20.7%) strongly disagree, while 56 (16.8%) agree, 23 (6.8%) neutral and 9 (2.7%) strongly agree. The mean value of the item is 2.28, and its SD is 1.056, showing a high level of disagreement. The outcomes of this study reveal that the majority of members of consumer cooperatives do not get dividends either on share capital or on a patronage basis from the cooperative. This implies that members of the cooperatives do not user benefit from dividends, which could lead to the conclusion that members' sense of ownership and user benefits of the cooperative have been weakened.

Lastly, respondents were requested to assess their level of agreement with the statement "members of the cooperatives are decision makers on major cooperative issues." Based on Table 2, 221 (66.2%) agreed, 58 (17.4%) disagreed, and 33 (9.9%) remained neutral. While 18 (5.3%) strongly agreed, 4 (1.2%) strongly disagreed. The mean value is 3.57, and the SD is 0.880. As per the findings, the majority of respondents thought cooperative members made decisions for their cooperatives. This implies that members are powerful decision-makers who rigorously implement the user-owner principle.

4.2. Examining the Governance Factors That Affect Consumer Cooperative Development in the Study Area

The second objective of this study is to examine how the governance factors influence consumer cooperative development in the study area. Accordingly, this study's established governance indicators include board gender diversity, board qualification, board commitment, and board communication. Hence, the study's findings are depicted in Table 4.

Table 4. Descriptive Statistics of Board Gender Diversity.

S. No	Variable description		Frequency						Mean	Standard Deviation (SD)
S. No	Variable description		SD	DA	N	A	SA	Total	Mean	Standard Deviation (SD)
1	There is a legal framework to encourage the participation of female members on the board.	No	22	178	20	96	18	334	2.59	1.109
1		%	6.6	53.3	6.0	28.7	5.4	100	2.59	1.109
2	Gender diversity enhances the monitoring role of the board of directors	No	14	96	22	198	4	334	3.25	1.019
2		%	4.2	28.7	6.6	59.3	1.2	100	3.25	1.019
3	Inactive participation of women in board leadership results in significant obstacles to consumer cooperative development.	No	8	30	15	273	8	334	3.75	0.756
3		%	2.4	9.0	4.5	81.7	2.4	100	3.75	0.756

Source: Field Survey (2026).

The study's results show that the majority of respondents, 178 (53.3%), with a mean value of 2.59 and SD of 1.109, disagree that there is a legal framework to encourage the participation of female members on the board. However, regarding ‘‘gender diversity enhances the monitoring role of the board of directors'' 198 (59.3%) of respondents expressed their level of agreement as they agreed with the mean value and SD of 3.25 (1.019), and 273 (81.7%) of respondents with the mean value and SD of 3.75 (0.756) agreed that inactive participation of women in board leadership results in significant obstacles in consumer cooperative development. From these findings, we may conclude that board gender diversity in the sample cooperative has weakened, and there is no clear legislative framework or endeavours to participate and promote women on the board of directors. Likewise, we can conclude that gender diversity enhances the monitoring role of the board by contributing diverse viewpoints toward cooperative market development. However, the majority of respondents believed that the inactive participation of women in the board leadership of the cooperatives hampered the consumer cooperative development.

The finding that gender diversity enhances the board's monitoring role is consistent with the findings of

[39]

, who researched board gender diversity and business performance in Japan and found that having a more diverse board of directors could boost a firm's performance because it gives diverse viewpoints and ideas.

Table 5. Descriptive Statistics of Board Qualification.

S. No	Variable description		Frequency						Mean	Standard Deviation (SD)
S. No	Variable description		SD	DA	N	A	SA	Total	Mean	Standard Deviation (SD)
1	Board members' academic qualifications have been considered before election to the cooperative board	No	10	226	22	58	18	334	2.57	0.991
		%	3.0	67.7	6.6	17.4	5.4	100
		%	7.8	54.5	6.0	30.5	1.2	100
2	The educational qualification of directors has a positive effect on their monitoring and management of cooperatives	No	7	86	20	217	4	334	3.37	0.965
2		%	2.1	25.7	6.0	65.0	1.2	100	3.37	0.965

Source: Field Survey (2026).

According to the results presented in Table 5, 226 (67.7%) of respondents, with a mean and SD of 2.57 (0.991), disagreed that board members' academic qualifications were considered before election to the cooperative board. However, 217 (65%) of respondents, with a mean value and SD of 3.37 (0.965), believed that the educational qualification of directors has a positive effect on their monitoring and management of cooperatives. From this finding, we can conclude that during the election of the board of directors at general assembly meetings, the academic qualifications of the board were not taken into account, which implies weak governance in the cooperative and cannot successfully carry out the cooperative's performance. Board directors' education qualifications have a positive effect on consumer cooperative development. The Key Informant Interview (KII) confirms that, despite the importance of the academic qualification of boards, the general assembly has not considered board qualification before the election; instead, board commitment is highly valued.

4.3. Analysing How Government Intervention Promotes Consumer Cooperative Development in the Study

Table 6. Descriptive Statistics of Government Intervention.

S. No	Variable description		Frequency						Mean	Standard Deviation (SD)
S. No	Variable description		SD	DA	N	A	SA	Total	Mean	Standard Deviation (SD)
1	The government formulates appropriate policies and strategies to develop cooperatives.	No	70	177	1	48	38	334	2.42	1.280
1		%	21.0	53.0	.3	14.4	11.4	100	2.42	1.280
2	The government encourages cooperatives' access to finance	No	157	85	3	60	29	334	2.16	1.400
2	The government encourages cooperatives' access to finance	%	47.0	25.4	.9	18.8	8.7	100	2.16	1.400
3	Government involvement in decision-making and managerial matters hampers the autonomy of your consumer cooperative.	No	39	70		182	43	334	3.36	1.270
3		%	11.7	21.0		54.5	12.9	100	3.36	1.270

Source: Field Survey (2026).

According to the results of Table 6, the majority of respondents, 177 (53%), with a mean value and SD of 2.42 (1.280), indicated their level of agreement in that they disagreed with the government formulating appropriate policies and strategies to develop cooperatives. Further, 157 (47%) of respondents, with a mean value and SD of 2.42 (1.280), disagreed that the government encourages cooperatives' access to credit. In terms of cooperative autonomy, 182 (54.5%) of respondents agreed, with a mean value of 3.36 and SD of 1.270, that government involvement in decision-making and managerial matters affects the cooperative's autonomy to make its own decisions. In light of these findings, we can conclude that government intervention in the formulation of policies and strategies, as well as the provision of financing to cooperatives, is not widely done. It implies that, unfortunately, cooperatives are led without having policies and strategies, as well as without access to finances, which would undoubtedly impede consumer cooperative development.

Despite the cooperatives being autonomous institutions, in this case, government interventions in decision-making and managerial matters have a significant negative effect on cooperatives, and cooperatives are becoming highly politicized, which discourages the development of cooperatives. The study's KII also confirms that the government is heavily involved in cooperative decision-making and management, which limits their autonomy, and that cooperatives in this country, Ethiopia, lack a policy and strategy that would assist them in fostering their development. Regarding government intervention towards decision making, the findings are congruent with those of

[15]

, who studied in Gambela, Ethiopia, and concluded that the government intervention in cooperative decisions and management was in contrast to the organization's autonomy. High government involvement in cooperative decisions and management discourages cooperatives and their members from engaging in their cooperatives, causing the cooperatives to fail.

4.4. Analysis of Pearson Correlation and Multiple Linear Regression of the Variables

To answer the study's objectives, it is essential to carry out Pearson correlation and multiple linear regression analysis to measure cooperative development and how the independent variables relate to the dependent variable. Before we go into the regression analysis, it is necessary to clarify the right interpretations of the statistical values of the Pearson correlation, as shown below.

4.4.1. Pearson Correlation

Different scholars present different interpretations of the Pearson correlation. However, the Pearson correlation indicators, according to

[10]

, range from -1 to +1 to 0. Where 0 implies no relationship, -1 denotes a perfect negative relationship, and +1 represents a perfect positive relationship. Furthermore, correlations between .10 and .29 are considered weak correlations, .30 to .49 as moderate correlations, and .50 to 1 as strong correlations

[22]

Table 7. Description of Pearson Correlation.

Correlation coefficient values	Interpretation
-1	perfect negative correlation
1	perfect positive correlation
.10 to .29	small correlation
.30 to .49	moderate correlation
.50 to 1.00	strong correlation

Sources:

[10, 22]

Pearson correlation coefficients are used to measure how closely the dependent and independent variables are connected. The findings of this study, which are presented in Table 8, indicate the correlation between the dependent variable (cooperative development) and the independent variable.

Table 8. Pearson Correlation Between the Independent and Dependent Variables.

Correlations
		User control	User own	User benefit	Board commitment	Board communication	Board gender diversity	Board qualification	Government intervention	Cooperative development
User control	Pearson Correlation	1	.986^**	.898^**	.684^**	.819^**	.975^**	.999^**	.873^**	.827^**
	Sig. (2-tailed)		.000	.000	.000	.000	.000	.000	.000	.000
	N	334	334	334	334	334	334	334	334	334
User own	Pearson Correlation	.986^**	1	.859^**	.637^**	.786^**	.951^**	.987^**	.842^**	.799^**
	Sig. (2-tailed)	.000		.000	.000	.000	.000	.000	.000	.000
	N	334	334	334	334	334	334	334	334	334
User benefit	Pearson Correlation	.898^**	.859^**	1	.733^**	.760^**	.915^**	.898^**	.935^**	.735^**
	Sig. (2-tailed)	.000	.000		.000	.000	.000	.000	.000	.000
	N	334	334	334	334	334	334	334	334	334
Board commitment factor	Pearson Correlation	.684^**	.637^**	.733^**	1	.536^**	.723^**	.684^**	.568^**	.677^**
	Sig. (2-tailed)	.000	.000	.000		.000	.000	.000	.000	.000
	N	334	334	334	334	334	334	334	334	334
Board communication factor	Pearson Correlation	.819^**	.786^**	.760^**	.536^**	1	.854^**	.816^**	.679^**	.890^**
	Sig. (2-tailed)	.000	.000	.000	.000		.000	.000	.000	.000
	N	334	334	334	334	334	334	334	334	334
Board gender diversity factor	Pearson Correlation	.975^**	.951^**	.915^**	.723^**	.854^**	1	.975^**	.890^**	.855^**
	Sig. (2-tailed)	.000	.000	.000	.000	.000		.000	.000	.000
	N	334	334	334	334	334	334	334	334	334
Board qualification factor	Pearson Correlation	.999^**	.987^**	.898^**	.684^**	.816^**	.975^**	1	.872^**	.824^**
	Sig. (2-tailed)	.000	.000	.000	.000	.000	.000		.000	.000
	N	334	334	334	334	334	334	334	334	334
Government intervention factor	Pearson Correlation	.873^**	.842^**	.935^**	.568^**	.679^**	.890^**	.872^**	1	.666^**
	Sig. (2-tailed)	.000	.000	.000	.000	.000	.000	.000		.000
	N	334	334	334	334	334	334	334	334	334
cooperative development	Pearson Correlation	.827^**	.799^**	.735^**	.677^**	.890^**	.855^**	.824^**	.666^**	1
	Sig. (2-tailed)	.000	.000	.000	.000	.000	.000	.000	.000
	N	334	334	334	334	334	334	334	334	334
**. Correlation is significant at the 0.01 level (2-tailed).

Source: Survey Data Own Computed (2026).

Positive correlation coefficients reveal a positive relationship between the two variables, but negative correlation coefficients reflect a negative association. This research finding, as shown in the above Table 8 correlation, implies that the unique cooperative principle factors influencing the cooperative development (independent variables) are—user control (.827), user own (.799), user benefit (.735), and the governance factors affecting the cooperative development (independent variables) are—board commitment (.677), board communication (.890), board gender diversity (.855), boar qualification (.824) and government intervention (.666)—have a strong positive and statically significant relationship and highly affect development of the consumer cooperatives. We can conclude from the findings that none of the variables has a P (sig) value greater than 0.05. Therefore, the constructed eight independent variables could be utilized to predict the development of consumer cooperatives.

4.4.2. Multiple Linear Regression

The strength of the fit of a model is most commonly evaluated using R². R² is calculated as the square of the correlation coefficient. It tells us what percent of the variability in the response variable is explained by the model

[34]

. In this study, the regression analysis model's summary includes the values of R, R square, Adjusted R square, and Standard Error of the Estimate. It's known as Pearson R. Furthermore, the R² value reflects a good model fit. The regression analysis of the findings of this study is depicted in Table 9.

Table 9. Model Summary for the Goodness of Fit.

Model summary^b
Model	R	R Square	Adjusted R Square	Std. Error of the Estimate	Change Statistics
Model	R	R Square	Adjusted R Square	Std. Error of the Estimate	R Square Change	F Change	df1	df2	Sig. F Change
1	.938^a	.880	.877	.187	.880	296.571	8	325	.000
a. Predictors: (Constant), Government intervention, Board commitment, Board communication, User own, User benefit, Board gender diversity, User control, Board qualification.
b. Dependent Variable: cooperative development

Source: Survey Data Own Computed (2026)

The study's findings, which are shown in Table 9, revealed the regression outcome. For this study, the regression's outcome, which has an R Square value of .880, meaning = 88%, confirms the strong positive relationship between the dependent and independent variables. The eight predictors (user control, user own, user benefit, board commitment, board communication, board gender diversity, board qualification, and government intervention) that were looked at in this study reflect 88% of changes (variations) in the model can be predicted using the independent variables or the total variation in the dependent variable (cooperative development) is affected by 88% changes in the independent variables. In other words, 88% of the development of consumer cooperatives is explained by the constructed independent variables in the research area. The remaining 12% of the variables could be addressed by other predictors that are not investigated and considered in this study.

Based on this finding, it can be concluded that applying independent variables such as user control, user owner, user benefit, board commitment, board communication, board gender diversity, board qualification, and government intervention could have a significant impact on the development of consumer cooperatives. Therefore, the constructed variables cooperative principles (user control, user own, user benefit) and governance variables (board commitment, board communication, board gender diversity, board qualification), and government intervention imply that more effective and powerful in boosting consumer cooperative development in the study area.

In this finding, the variables such as board commitment and board communication are in line with the study conducted by

[14]

, which is discussed in the literature review, and found that the communication of the board with members and their commitment to being very strong, and have a significant impact on the success of the primary consumer cooperative in Burayu town, Ethiopia.

4.4.3. Coefficient of the Regression Model

The established multiple linear regression model for this research is delivered in Table 10, along with the independent variable coefficients.

Table 10. Coefficient of the Regression Model.

Coefficients^a
Model		Unstandardized coefficients		Standardized coefficients	t	Sig.
Model		B	Std. Error	Beta	t	Sig.
1	(Constant)	.557	.070		7.926	.000
	User control	.182	.271	.248	.670	.001
	User own	.207	.098	.300	2.120	.000
	User benefit	-.496	.064	.699	-7.737	.000
	Board commitment	.473	.045	.457	10.453	.000
	Board communication	.619	.038	.835	16.219	.000
	Board gender diversity	-.163	.108	.273	-.220	.002
	Board qualification	-.206	.290	.281	1.241	.004
	Government intervention	.253	.050	.448	5.069	.000
a. Dependent variable: Market development

Source: Survey Data Own Computed (2026).

To determine the factor with the greatest influence, one needs to carefully examine the standardized coefficient. Multiple linear regression results show that all predicted coefficients for independent variables are significant. The constant's significance is indicated by β0 = 0.557's p-value of .000, which is less than 0.05. As per the findings from Table 10 above (independent variables)—The cooperative principles user control with a beta of (0.248; P< 0.05), user own (0.300; P< 0.05), user benefit (0.699; P< 0.05) have a positive and significant influence on the development of consumer cooperatives (dependent variable) in the research area. Moreover, the governance factors — board commitment with a beta of (0.457; P< 0.05), board communication (0.835; P< 0.05), board qualification (0.281; P< 0.050, board gender diversity (0.273 P< 0.05), as well as government intervention (0.448; P< 0.05) have a positive and significant influence on the development of consumer cooperatives in the research area. Among these, we can conclude that board communication, user benefit, board commitment, government intervention, and user owner, followed by board qualification and board gender diversity, are the most statistically significant, and this implies that effective use of these predictors influences and enhances the development of the consumer cooperatives in the Mekelle study area.

The result reveals and implies that numerous strengths could be found in applying the user control, user own, user benefit, and governance factors such as (board commitment, board communication, board qualification) as well as government intervention, which positively influence consumer cooperatives' development. The outcomes of this study on board gender diversity and board education qualification are in agreement with the findings reported by

[37]

, who studied corporate governance practices and the performance of consumer cooperative societies in Addis Ababa, Ethiopia, and found that board education qualification and board gender diversity had a positive effect on consumer cooperative performance.

5. Conclusions

Depending on the findings of the study, the conclusions, recommendations, and areas for further study are drawn from the final result and forwarded as follows.

The study found that the consumer cooperatives do not conduct annual audits, and members lack knowledge and control over their finances. As a result, members are uncertain about their resources, which leads to a lack of user control over their resources and hurts cooperative marketing development. Implies that a lack of rigorous auditing fosters distrust between members and the board of directors, and a loss of the user-control principle has a detrimental impact on consumer cooperative development. As a result, the intrinsic principles of cooperatives are not applied as they should.

Additionally, it was also deduced that cooperative elections in general assembly meetings and decision-making processes were mostly based on the principle of one person, one vote, which aids in controlling the rich's advantage over the poor. Members have equal voting power, regardless of how much share capital they have contributed or how much they patronize the cooperative. Furthermore, members vote democratically, exercise their rights at general assembly meetings, support the user control principle, and assist the consumer cooperative in maintaining development.

The study inferred that the members of the cooperatives do not user benefits from dividends, which could lead to the conclusion that members' sense of ownership and user benefits of the cooperative have been weakened. Gender diversity was found to strengthen the board's monitoring role by providing diverse viewpoints on cooperative development; however, board gender diversity in the cooperative has weakened, and there is no clear legislative framework or effort to promote women on the board of directors, which affects the governance of consumer cooperative development. Despite the board directors' education qualifications having a positive effect on cooperative development, during general assembly elections, the board's academic qualifications were not considered, implying weak governance in the cooperative and an inability to successfully carry out the cooperative's performance. Therefore, the governance system of consumer cooperatives has been affected by factors such as gender diversity and the board's academic qualifications.

The role of government in policy-making development, as well as financing cooperatives, was found to be very limited. Regrettably, Ethiopia's cooperatives are now led without policies and strategies, which would undoubtedly hinder cooperative development. Even though cooperatives should be autonomous institutions, government interventions in decision-making and managerial matters have a significant negative effect on cooperatives, and cooperatives are becoming highly politicized, discouraging cooperative development. The study found and concluded that the independent variables, such as user owner, user benefit, user control, board commitment, board communication, board gender diversity, board qualification, and government intervention, could have a strong correlation and statistically significant positive effect on the development of consumer cooperatives. As a result, utilizing these predictors was found to be more effective and powerful in boosting consumer cooperative development in the study area.

6. Recommendations

Based on the study's findings, the researcher proposes the following recommendations to boost the development of consumer cooperatives and contribute to the members' economic development, thus enhancing the lives of cooperative members.

1) The intrinsic cooperative principles, user control, user owner, and user benefit have not been fully and effectively practiced, and due to this, members have not developed a sense of ownership in their cooperatives; they are uncertain about their resources. Therefore, the regional cooperative agency must audit the cooperatives or develop a guideline to outsource the auditing and provide financial clarity to the members and the board of directors.

2) Cooperatives are now being led without policies and strategies; the government must develop policies and strategies to foster the development of cooperatives. Since cooperatives are autonomous institutions, the government should refrain from intervening in the decision-making and managerial concerns of the cooperatives.

3) In the governance of cooperatives, the board's academic qualifications and gender diversity should be considered. During general assembly elections, it is crucial to consider the board's academic qualifications to achieve improved performance and governance in cooperatives.

4) The study advised that cooperative board members, managers, government officials, and other stakeholders utilize and carry out internal cooperative principles and governance factors to enhance cooperative development. Women's active participation in cooperative board leadership strengthens the board's monitoring role by providing diverse viewpoints on cooperative matters; hence, there should be a clear legislative framework to promote women on the board of directors.

5) The government should refrain from intervening in the decision-making and managerial concerns of the cooperatives. It is suggested that the cooperative sector should utilize these predictors effectively to boost consumer cooperative development.

7. Limitations and Suggestions for Further Studies

This research was focused on the determinants of cooperative development in Tigray, Ethiopia: The case of the consumer cooperative in Mekelle, which was limited and confined to a few factors due to time and financial constraints. Other academics should focus on factors that may influence the development of cooperatives that were not considered in this study, like leadership in cooperatives, market infrastructures of cooperatives, cooperative finance, cooperative professionalism, and others. Additionally, the study's focus on only two sub-cities may limit its ability to provide a comprehensive picture. Other academics should thus do regional or national studies on consumer cooperatives.

Abbreviations

CC	Federal Cooperative Commission
CITG	Commission of Inquiry Tigray Genocide
CSA	Central Statistics Agency
FDRE	Federal Democratic Republic of Ethiopia
ICA	International Cooperative Alliance
KII	Key Informant Interview

Acknowledgments

This research would not have been wrapped up without the help of Almighty God. I must thank God above all else for final this research work. I am deeply thankful to Mr. Fitsum Abrha, founder and chief executive of Amigos Saving and Credit Cooperative, for his kind and brilliant leadership contributions to this research work. I would like to highly appreciate the tremendous help and inspiration I have received from several other people and friends whom I did not mention here, and may the Almighty Lord bless you all.

Author Contributions

Yemane Gebremeskel Gebrehiwet: Conceptualization, Data curation, Formal Analysis, Investigation, Methodology

Conflicts of Interest

The author declared no conflicts of interest.

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Gebrehiwet, Y. G. (2026). Determinants of Cooperative Development in Tigray, Ethiopia: The Case of Consumer Cooperatives in Mekelle. European Business & Management, 12(4), 71-85. https://doi.org/10.11648/j.ebm.20261204.12

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Gebrehiwet, Y. G. Determinants of Cooperative Development in Tigray, Ethiopia: The Case of Consumer Cooperatives in Mekelle. Eur. Bus. Manag. 2026, 12(4), 71-85. doi: 10.11648/j.ebm.20261204.12

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Gebrehiwet YG. Determinants of Cooperative Development in Tigray, Ethiopia: The Case of Consumer Cooperatives in Mekelle. Eur Bus Manag. 2026;12(4):71-85. doi: 10.11648/j.ebm.20261204.12

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@article{10.11648/j.ebm.20261204.12,
author = {Yemane Gebremeskel Gebrehiwet},
title = {Determinants of Cooperative Development in Tigray, Ethiopia: The Case of Consumer Cooperatives in Mekelle},
journal = {European Business & Management},
volume = {12},
number = {4},
pages = {71-85},
doi = {10.11648/j.ebm.20261204.12},
url = {https://doi.org/10.11648/j.ebm.20261204.12},
eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ebm.20261204.12},
abstract = {The predominant objective of this study was to investigate determinant factors affecting consumer cooperative development: The case of consumer cooperatives in Mekelle, Tigray. In response to the objective, a descriptive research design was employed by using a mixed research approach, which comprises both quantitative and qualitative methods. Both primary and secondary sources of data were used. A sample of 334 respondents was chosen using a random sampling technique. The data were analysed using SPSS. Pearson correlation and multiple linear regression model analysis were used. The study found that the intrinsic principles of cooperatives were not effectively practiced as they should have been, hence members lost a sense of ownership in their cooperatives. The governance system of consumer cooperatives—gender diversity and the board's academic qualifications had waned. The study found that cooperatives are led without policies and strategies, which would undoubtedly impede their development. Government interventions in managerial and decision-making processes limit the autonomy of cooperatives. The intrinsic principles of cooperative variables—user-owner, user benefit, user control, and the governance variables—board commitment, board communication, board gender diversity, board qualification, and government interventions proved to be statistically significant effects on the development of consumer cooperatives. This implies that effective use of these predictors enhances the development of consumer cooperatives in the study area. The study recommends that the government should develop a cooperative policy and strategy to boost cooperative development. The board's academic qualifications and gender diversity must be considered during general assembly meetings to achieve improved performance and governance in cooperatives. The government should refrain from intervening in the decision-making and managerial concerns of the cooperatives.},
year = {2026}
}

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TY - JOUR
T1 - Determinants of Cooperative Development in Tigray, Ethiopia: The Case of Consumer Cooperatives in Mekelle
AU - Yemane Gebremeskel Gebrehiwet
Y1 - 2026/07/22
PY - 2026
N1 - https://doi.org/10.11648/j.ebm.20261204.12
DO - 10.11648/j.ebm.20261204.12
T2 - European Business & Management
JF - European Business & Management
JO - European Business & Management
SP - 71
EP - 85
PB - Science Publishing Group
SN - 2575-5811
UR - https://doi.org/10.11648/j.ebm.20261204.12
AB - The predominant objective of this study was to investigate determinant factors affecting consumer cooperative development: The case of consumer cooperatives in Mekelle, Tigray. In response to the objective, a descriptive research design was employed by using a mixed research approach, which comprises both quantitative and qualitative methods. Both primary and secondary sources of data were used. A sample of 334 respondents was chosen using a random sampling technique. The data were analysed using SPSS. Pearson correlation and multiple linear regression model analysis were used. The study found that the intrinsic principles of cooperatives were not effectively practiced as they should have been, hence members lost a sense of ownership in their cooperatives. The governance system of consumer cooperatives—gender diversity and the board's academic qualifications had waned. The study found that cooperatives are led without policies and strategies, which would undoubtedly impede their development. Government interventions in managerial and decision-making processes limit the autonomy of cooperatives. The intrinsic principles of cooperative variables—user-owner, user benefit, user control, and the governance variables—board commitment, board communication, board gender diversity, board qualification, and government interventions proved to be statistically significant effects on the development of consumer cooperatives. This implies that effective use of these predictors enhances the development of consumer cooperatives in the study area. The study recommends that the government should develop a cooperative policy and strategy to boost cooperative development. The board's academic qualifications and gender diversity must be considered during general assembly meetings to achieve improved performance and governance in cooperatives. The government should refrain from intervening in the decision-making and managerial concerns of the cooperatives.
VL - 12
IS - 4
ER -

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Yemane Gebremeskel Gebrehiwet

Department of Rural Development and Agricultural Extension, Mekelle University, Tigray Mekelle, Ethiopia

Biography: Yemane Gebremeskel Gebrehiwet, holds two master's degrees, the first of which is a Master of Arts (MA) in Leadership and Governance from the Ethiopian Civil Service University in 2021. Secondly, he holds another Master of Science (MSc) in Rural Development in 2025 from Mekelle University, Ethiopia, Tigray. In both of them he got the highest academic achievement and excellent thesis result. He has been working in different positions and currently, he is also working as a Regional Deputy Head of the Cooperative and Market Development Agency. So far, he has published three journal articles in peer-reviewed international publications. He devoted and industrious professional who excels at leading, coordinating, and organizing people with varied perspectives. He is also enthusiastic to learn from others and to impart that knowledge to others. He has a great deal of experience in the cooperative field; hence, his study focuses on cooperatives.

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Gebrehiwet, Y. G. (2026). Determinants of Cooperative Development in Tigray, Ethiopia: The Case of Consumer Cooperatives in Mekelle. European Business & Management, 12(4), 71-85. https://doi.org/10.11648/j.ebm.20261204.12

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Gebrehiwet, Y. G. Determinants of Cooperative Development in Tigray, Ethiopia: The Case of Consumer Cooperatives in Mekelle. Eur. Bus. Manag. 2026, 12(4), 71-85. doi: 10.11648/j.ebm.20261204.12

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Gebrehiwet YG. Determinants of Cooperative Development in Tigray, Ethiopia: The Case of Consumer Cooperatives in Mekelle. Eur Bus Manag. 2026;12(4):71-85. doi: 10.11648/j.ebm.20261204.12

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