The Bank of Industry (BoI) has begun the disbursement of N15,000 TraderMoni loans to beneficiaries who have successfully paid back their first N10,000 loans.
According to the bank, the disbursement is in response to increasing beneficiary repayments recorded under the scheme.
Through a flexible weekly loan repayment plan of N430 per week paid over six months, the bank recorded higher repayments.
BoI explained that the beneficiaries paid backusing their BOI-GEEP loan on the PayDirect available at commercial bank branches across Nigeria and also through the purchase of repayment scratch cards that can be procured from TraderMoni agents deployed across any one of 2,260 markets/cluster locations.
Indeed, available MSME data show that even though small businesses employ about 84 percent of the labour force; contribute 50per cent of the GDP, access to access funding that can move their businesses beyond the MSME level to the Small/Medium Enterprise level remains limited.
In 2017, the MSME segment received a meagre 0.04per cent of all bank loans originated in Nigeria.
To address the challenges and in recognition of the sheer possibilities that the MSME sector holds for the economy; in 2016, the Federal Government launched the Government Enterprise and Empowerment Programme (GEEP).
“Through its signature products — MarketMoni, FarmerMoni, and TraderMoni — the programme has reached over 1.5 million Nigerians through small loans. These loans, starting from N10,000 up to N300,000, have helped beneficiaries to transform their businesses.
“If these beneficiaries repay their first loan as promised, they immediately qualify for the second level N15,000 loan. After repaying the second loan, these beneficiaries will qualify for a N20,000 loan, then N25,000 loan, and finally they graduate into the MarketMoni loan program where they can get up to N100,000 in interest-free,collateral-free loan.
Through a gradual step by step process, these MSMEs can grow and create jobs.
“This incentive-based model is working. Despite the fears of traditional lenders on giving loans to MSMEs — in part due to lack of formal identification, limited financial track record, and no collateral — TraderMoni continues to achieve success with loan repayments”, the bank explained.