Correct Option: C. Staff loans cannot exceed N250,000 Detailed Explanation: The decision made by the board regarding loans from the cooperative is that staff loans cannot exceed N250,000. This decision likely stems from a desire to manage financial risk and ensure that the cooperative remains sustainable while providing support to its members.

1. Understanding the Context:
2. Cooperatives are member-owned organizations that often provide financial services, including loans, to their members. The board's decision reflects a balance between supporting staff and maintaining the cooperative's financial health.
3. By setting a limit on the amount that can be borrowed, the board can mitigate the risk of default, which can occur if loans are too large relative to a member's ability to repay.
4. Rationale Behind the Limit:
5. Financial Responsibility: Limiting loans to N250,000 encourages responsible borrowing. It ensures that staff do not overextend themselves financially, which could lead to difficulties in repayment.
6. Sustainability of the Cooperative: By capping loan amounts, the cooperative can better manage its resources and ensure that it can continue to lend to other members in the future. This is crucial for the longevity of the cooperative.
7. Equity Among Members: A loan cap helps ensure that all members have equal access to borrowing opportunities. If loans were unlimited, a few members could monopolize the funds, leaving others without support.
8. Implications of the Decision:
9. This decision may also lead to the establishment of clear guidelines for loan applications, repayment terms, and interest rates, which can further enhance the cooperative's operations and member satisfaction.

Why the Other Options Are Incorrect:

• Option A: No loans can be given to staff under any circumstances.
• This option is too extreme and does not reflect a supportive cooperative environment. The purpose of a cooperative is to assist its members, and completely prohibiting loans would contradict that mission.
• Option B: All loan requests must be approved by the staff union.
• While involving the staff union in the approval process could be beneficial for transparency and fairness, it is not a practical or efficient approach for managing loans. This could lead to delays and bureaucratic hurdles that may discourage members from seeking loans.
• Option D: The cooperative must stop lending money to staff immediately.
• Similar to Option A, this option is overly restrictive. Stopping all lending would undermine the cooperative's purpose and could lead to dissatisfaction among members who rely on loans for various needs.

Summary of Key Points:

• The board decided that staff loans cannot exceed N250,000 to promote responsible borrowing and financial sustainability.
• This limit helps manage risk and ensures equitable access to loans for all members.
• Other options either restrict lending too much or introduce unnecessary complications in the loan approval process.

By understanding the rationale behind the board's decision, members can appreciate the balance between support and financial prudence that cooperatives strive to maintain.