For country striving to escape from poverty the growth and expansion of cooperative society has dramatic implication in changing the living standards of small farmers. In country like Ethiopia where the overall economy is based on agriculture, the role of multi purpose cooperative societies has paramount importance in agricultural product improvement through delivery of inputs to their members and marketing output of their members. In order to survive and serve their members, cooperative organizations have to have a strong, dedicated and vibrant leadership. Because it is believed that above all the successes of cooperative societies depend on the quality of leadership they possess. It is undisputed fact that primary cooperatives are facing many acting and interacting forces that they may not withstand with their meagre means and thus mostly they are inefficient. Therefore, the factors affecting leadership need to be identified and known to take a foot step towards designing strategies for cooperative development. Hence this study is initiated to identify the reason why cooperative leaders are inefficient to serve their members.