Moni, a digital platform that leverages social trust to deliver financial services in Africa, says it has launched a range of business loans to drive growth for Small and Medium Scale Enterprises (SMEs)
The firm in a statement on Monday in Lagos said that the business loan would enable market traders, spare part dealers and textile traders in Africa to leverage the power of their communities to access the working capital they need to run their businesses.
According to the statement, across Africa and other emerging markets, community groups and associations play an important role in providing various essential services.
It said that they also facilitate accountability and self-governance that enables communities to function as effectively as possible.
Femi Iromini, the Chief Executive Officer of Moni, said the company was a pioneering community finance model that builds on the importance of group responsibility in African communities to improve access to essential financial services.
“Moni has built a risk engine that combines financial data and business performance with social intelligence to enable more effective credit decisioning for African SMEs.
“Starting with Nigeria, small business owners with good social reputation simply need to join a lending cluster with an invite from an existing Moni user and once eligibility has been confirmed, they can access financing in five minutes or less.
“Once the loan is disbursed, the cluster shares responsibility for the loan and members are able to access funds from an automated savings pot to bail out members if needed,” he said.
Iromini said that according to the African Development Bank (AfDB), SMEs account for more than 90 percent of businesses and almost 80 percent of employment in Africa.
He, however said that insufficient data and ineffective credit decisioning by traditional financial institutions had led to a 421 billion dollar credit gap, with business owners unable to access the working capital they need to scale.
Iromini said: “Our business loans product is just one of the ways we are innovating around our unique context in Africa to deliver the financial services business owners need to create long-lasting wealth.
“We have ample evidence to show that this approach works and we are excited to be bringing more businesses on board to drive the economic development we all want to see on the continent.”
BRANDPOWER reports that the Y Combinator-backed startup, an American technology company that invests in a wide range of startups, launched the pilot of its community-powered loans in August 2021 with 3,000 mobile money agents.
In 2022 alone, Moni disbursed more than 22 million dollars in loans to no fewer than 11,000 SMEs, with a 99 percent repayment rate.
