Transforming micro businesses with BoI-managed Trader Moni
All over the world, responsible and responsive governments initiate financial packages targeted at transforming the micro, small and medium enterprises (MSMEs), otherwise known as emerging businesses.
In 2015, for example, China created a 40 billion yuan ($5.84 billion) national venture capital fund for emerging businesses. Last year, China also initiated a national development fund for small and medium-sized enterprises and another national fund for transforming technological achievements. Similarly, Ghana set up a $100 million fund for small businesses and innovation in 2017. The East Africa is not left out as Kenyan government established Biashara Kenya Fund in 2017 to provide loans for small businesses in the country at six percent interest rate.
The schemes may differ in structure but they have the same objective, which is to make money available for small businesses to enable them unleash their potential.
In line with this spirit, the Federal Government of Nigeria few weeks ago launched a new initiative under the Government Enterprise and Empowerment Programme (GEEP). The scheme, known as Trader Moni, is primarily focused on empowering two million petty traders between this month and the end of the year.
Trader Moni is targeted at helping micro businesses, especially petty traders, expand their trade by providing collateral-free loans of N10,000, repayable within a period of six months.
The scheme is structured in a way that beneficiaries can get access to a higher facility ranging from N15,000 to N50,000 when they repay N10,000 within the stipulated period.
No documents, no PVC
Contrary to claims in some quarters that micro enterprises must present their permanent voters’ cards (PVCs) before they can access the newly launched Trader Moni, Start-Up Digest gathered that traders do not need PVCs for the scheme.
Also, no document or property is needed to collect N10, 000 loan.
Traders willing to access the fund only need to register, get captured and receive the money through their phones.
Beneficiaries who collect N10,000 have six months to pay back the sum of N10, 250 in order to qualify for a bigger loan.
Under Trader Moni, beneficiaries can access N10,000 and pay back N10,250 to qualify for N15,000. Once they pay back N15,375, they will qualify for N20,000 loan. Also, paying back N21,000 qualifies them for N50,000.
Repayments can be made to BOI-GEEP loan account under PayDirect at banks.
Impact
Lucy is a pepper seller at Ojuwoye Market, Mushin, Lagos. Lucy said she had been hearing about Trader Moni for a while but did not believe that government would be giving people like her loans.
The woman never thought it would be easy to get a loan until Trader Moni berthed. This is basically because her loan applications have severally been turned down by banks when she needed to expand her business.
However, when she saw her fellow traders singing and dancing on stage talking about how they received alerts on their phones and gift items from government’s Trader Moni, she too decided to try it for herself.
Right there in the market, without having to leave her wares, a Trader Moni agent came to enumerate her. The agent took down her details, captured her photograph and within 48 hours, she received a credit alert on her phone.
With only N430 to pay back every week at selected banks for a period of six months, Lucy has obtained the loan and is now part of the financial system. She stands the chance of accessing a higher loan if she repays N10, 250 within the stipulated time period.
BoI and financial inclusion
Lucy is just one of the two million people Muhammadu Buhari-led government is targeting across Nigeria through Trader Moni.
Lucy could have been excluded from the financial system had there not been this scheme.
A number of Nigerians are still excluded from the financial system, according to several surveys.
A study conducted in Nigeria in 2008 by a development finance institution showed that 53.0 percent of adults in the country were excluded from financial services. The number has dropped to 23 million today, thanks to the activities of several institutions, including the Bank of Industry (BoI). The BoI is in charge of disbursing Trader Moni, just like it has judiciously managed and disbursed many others such as Cotton, Textile and Garment (CTG) Fund, Cement Fund and Cottage Fund, among others.
Toyin Adeniji, executive director, BoI, said the goal of Trader Moni was to take financial inclusion down to the grassroots.
“The President Muhammadu Buhari-led administration recognised the contribution of petty traders to economic development and identified the fact that some of them may not have what the commercial banks may require to grant loan, hence, his support for this initiative to help them grow their businesses,” Adeniji said.
Uzoma Nwagba, chief operating officer, GEEP said, this initiative was aimed to expand financial inclusion “because we have over 23 million Nigerians that are financially excluded, this administration aimed to reach them so that they can grow their businesses.”
In addition to Trader Moni, GEEP has ‘Farmer moni’ for farmers, which avail them the opportunity to access up to N300,000 loan each, as well as ‘Market Moni’ targeting market women, traders and artisans to get between N50,000 and N100,000.
Trader Moni was launched in five markets in Lagos: Ketu, Mushin, Ikotun, Agege and Abule Egba.
Mufliat Adewunmi, Iyaloja of Ojuwoye Market, was full of praise for the government for this laudable initiative. “We are happy about Trader Moni because it is a thing we have been expecting. The government should assist the masses, especially the traders. We thank Trader Moni. We thank the Federal Government for bringing this programme to us. It will help a lot, especially us traders, because we all know what we have been facing to get loans.”
Lucy, who never believed the government could do anything for her, now believes that something good can indeed come out of the country.
She says the money will not just benefit her business but help to provide for her family. Regarding the repayment, she said, “Before the six months, I will have repaid the N10, 000.”
ODINAKA ANUDU