Nigerian fintech startup Moni is introducing a new range of business loans that enable small business owners to access working capital by leveraging the power of their communities.
The company’s innovative community finance model builds on the concept of group responsibility in African communities to enhance access to financial services for SMEs across the continent.
To make credit decisions more effective, Moni has developed a risk engine that integrates financial data and business performance with social intelligence. Eligible small business owners in Nigeria with a good social reputation can join a lending cluster with an invitation from an existing Moni user. Once eligibility is confirmed, they can access financing in just five minutes or less.
After loan disbursement, the cluster shares responsibility for the loan. Members can access funds from an automated savings pot to bail out other members if needed. This community-powered approach ensures greater financial inclusion for SMEs who have been underserved by traditional financial systems in Africa.
Moni launched a pilot of its community-powered loans in August 2021, with 3,000 mobile money agents. In 2022, the Y Combinator-backed startup disbursed more than $22m in loans to over 11,000 SMEs, with a repayment rate of 99%.
“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,” said Femi Iromini, CEO and co-founder of Moni.
Conclusion
With its success in community-powered loans, Moni plans to expand its game-changing financial services to a wider range of African SMEs. Its unique model is making the most of what is already in place in African communities to create long-lasting wealth for business owners and their communities.
Not only that, small business owners can access working capital by leveraging the power of their communities.
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