Moni, a Nigerian fintech firm, has launched a new line of business loans targeting African SMEs.
The new loans are intended to help small businesses gain access to the working capital they require to operate and expand by harnessing the power of their communities.
In Africa and other emerging markets, community groups and associations offer critical services and defend the collective.
They allow for communal accountability and self-government.
Moni is pioneering a community finance model that leverages this type of group responsibility in African communities to provide small business owners with access to critical financial services.
According to the AfDB, SMEs account for over 90% of enterprises and approximately 80% of employment in Africa.
Due to traditional banking institutions’ poor data and credit decisioning, a $421 billion loan gap has been established, prohibiting business owners from scaling.
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Moni’s financial data and risk engine
Moni has created a danger processor that integrates financial data and company performance with social intelligence to assist African SMEs in making more successful financing decisions. Small company owners with a positive social reputation in Nigeria can get financing in less than five minutes after joining a lending cluster via an invitation from a current Moni user. After the loan has been disbursed, the cluster bears responsibility for the loan, and members have access to an automated savings pot to bail them out if necessary.
In August 2021, 3,000 mobile money agents piloted the Y Combinator-backed startup’s community-powered loans (more than 5,000 were on the waiting list). In 2022, Moni loaned $22 million to over 11,000 SMEs with a 99 percent return record. The company is expanding its community-powered strategy to help more African SMEs that have been underserved by the traditional financial system.
Moni CEO and co-founder Femi Iromini said, “Our community-powered business loans product is just one of the ways we are innovating around our unique context in Africa to make the most of what is already in place to deliver the financial services business owners need to create long-lasting wealth for themselves and their communities.” “Our method works, and we’re delighted to bring more businesses on board to boost the continent’s economic development.”
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About Moni
Mobile money agents are financed by Moni using a community-driven paradigm based on social trust. They completed 99% of the repayment and increased their revenue 100% MoM.
Moni is a platform that offers a variety of financial services for entrepreneurs and consumers, including working capital, savings, and insurance. It was founded in 2021 by Femi Iromini and Adedapo Sobayo, who had previously studied together and worked together on numerous initiatives.