Nigeria: Social Security - Federal Government Takes Interest-free Microcredit Lo...

Jul 2018
Nigeria, July, 04 2018 - The President Muhammadu Buhari-led administration introduced the Government Empowerment and Enterprise Programme (GEEP). The GEEP is one of the Social Intervention Programmes (SIPs), designed to offer zero interest rate loans to over 1.2 million beneficiaries at the grassroots.

The Government Enterprise and Empowerment Programme (GEEP) MarketMoni is a Social Intervention Programme (SIP) that provides loans of up to N300, 000 to rural dwellers. The scheme, anchored by the Bank of Industry (BoI), directly impacts traders, market women, artisans, and farmers across the country. COLLINS NWEZE captures experiences of some beneficiaries of the scheme.

Grassroots dwellers, petty traders, artisans, traders and cooperative societies are among the most neglected segments of the society when it comes to credit access in Nigeria.

Ironically, more than 70 per cent of Micro Small and Medium Enterprises (MSMEs) are operated by these categories of people. They lack access to loans and financial facilities to sustain and grow their businesses.

But, the narrative is changing as the Federal Government has taken steps to bridge the credit gap and create wealth for Nigerians on the lower rung of the economic ladder. To tackle the issue head-on at inception, the President Muhammadu Buhari-led administration introduced the Government Empowerment and Enterprise Programme (GEEP). The GEEP is one of the Social Intervention Programmes (SIPs), designed to offer zero interest rate loans to over 1.2 million beneficiaries at the grassroots.

Under the scheme, micro business owners, who hitherto had no access to loans to grow their businesses, are being offered unhindered access to affordable micro credit.

Some beneficiaries of the GEEP TraderMoni scheme, a unique micro credit facility rolled out nationwide by the government spoke on their experiences of the live-changing SIP.

Joining a long line of other selected beneficiaries, Mrs. Patience Ikhiapa was overjoyed to receive her payment notification during the pilot phase of the TraderMoni interest-free loan disbursement in Edo State.

Speaking on how she started her business, Ikhiapa said: “I thought it was a joke when a GEEP agent came to tell me that the government is helping people like me. Although I was reluctant at first, I gave the agent my details. Later, I got a call and a text to come for verification”.

According to her, she was trading with only N500.

She said: “I was selling cold pure water. Each day I buy a few bags and sell in public places. Things were very hard for me, sometimes at the end of the day, my gain may just be N300. In the process of hawking, I found a place in Sapele prison to sell bread and minerals to people. With this N10, 000 loan, I am planning to add more things to what I sell… I am very happy that little by little, things are getting better for me.”

Mrs. Ikhiapa, alongside 368 others, got the interest-free loan of N10,000 per person in Edo State. Asides the money, the beneficiaries also got food and some products from well-known fast-moving consumer goods brands, to add to their wares.

According to the GEEP organisers, majority of the beneficiaries were owners of ultra-small microenterprises, those known in the local parlance as petty traders. They were also mostly women, some with babies strapped to their backs.

“They were called because of a renewed focus of the government, to tackle hunger, reduce poverty and improve standard of living of those who are often left out of the conversation on micro finance and credit schemes,” the organisers said.

The government, through TraderMoni, seeks to offer interest-free micro loans to people like Ikhiapa, the food sellers, Mai Shais, petty craftsmen, shoe repairers, and other street traders. The scheme is an addition, to an existing one called MarketMoni, which already caters for market women, artisans, farmers and enterprising youths.

Another TraderMoni beneficiary, Benedicta Imanogbe, expressed gratitude to the government for the loan.

Mrs. Imanogbe, who is into soap making said: “I am going straight to the market to buy materials, more than the quantity I have always bought. I know people will be asking me where I got money, so, I will just be shouting that the government gave it to me. We do not believe money will get to people on the streets but this one is real.”

Daniel Martins, who ekes out a living as a plumber, said: “I have a little caravan where I sell small plumbing materials. Once I finish paying back this small loan, which will help buy few things, I will apply for a bigger loan to expand my business some more.

According to Vice President Yemi Osinbajo, TraderMoni is for petty traders with trading capital not more than N5, 000 and N10, 000.

Prof Osinbajo said: “We want to give those types of people some credit as well, and once they pay back, we will give them more money. We want to make sure that the very poor trader, no matter how poor you are, so long as you are trading or working, the Federal Government will support you by giving you some extra money to do whatever you are doing.

“So, every Nigerian who wants to work, who wants to do something, can get the opportunity to do some work.”

Explaining the TraderMoni scheme, the Chief Operating Officer of GEEP, Uzoma Nwagba, said since the scheme commenced 18 months ago, the government has been focusing on higher end of the micro-enterprises, disbursing N50, 000 to N300, 000 loans.

“However, TraderMoni is focused on ultra-micro-enterprises who are literally people on the streets, involved in commercial activities.

“We created a new category driven by extensive demand for much thinner, smaller loans that do not have much stringent requirements like Bank Verification Number (BVN) or belonging to a market association.

“These people do not have BVN or bank accounts. They just have their mobile phones. Our agents go to them and capture their data, and we can disburse to them by creating a mobile profile for them automatically.” Explaining further, once the target recipient’s data is captured, and verified, his/her details will be put in a system that the operators monitor extensively.

Nwagba said: “Subsequently, we will disburse a loan to you immediately that will come to your phone as a mobile money transfer and with that, you can go to withdraw the money at an Automated Teller Machine (ATM). You don’t need a card at the ATM, you just need the code that was sent to you then you can withdraw at any ATM in the country.”

He added that the idea is to provide loans to those with no hopes of accessing credit, and in time onboard them into the mainstream financial service sector, which is a good way to drive financial inclusion.

Nwagba said: “Think about it as the government taking interventionist approach of saying we have a category of Nigerians at the very base of the pyramid who are not even in our conversation because they are very difficult to track, hard to understand, they don’t have collateral, they are not educated, they do not have BVN, they do not have all the buzz and whistles and security that gives traditional lenders comfort.

“So, we are willing to take a risk to be able to absorb the critical needs of every Nigerians, and we are hoping to scale this programme to two million Nigerians over the next few months.”

He restated that the Buhari administration’s commitment every class of Nigerians.

“These are people who are underrepresented and underserved, especially when it comes to finance, he said, adding: “We work very closely with Vice President, Osinbajo and he is quite obsessive about making sure that the right people get these loans.

“That is why we can tell you that everybody who has gotten MarketMoni till this day, we can give you the name of the person, where they live, what they do, we can also track them and verify.

“We do not have money in bulk to a state government, party steward or government official, the money goes directly into the account of the beneficiaries. There is no intermediary and there are no exceptions. I think by doing that, we are ensuring the integrity of the process.”


GEEP Marketmoni enters Kano


During one of his visits to Kano to assess the scheme’s impact, Osinbajo met with a section of the over 11,000 beneficiaries of the GEEP MarketMoni in the state. According to the Executive Director of Bank of Industry (BoI), Toyin Adeniji, the programme is aimed at reinvigorating the economy at the base of the pyramid, the hotbed of Nigeria’s financially vulnerable.

Adeniji said: “GEEP MarketMoni is unprecedented in Nigeria’s history, granting interest-free credit facilities to existing microenterprises of market women and traders, artisans, enterprising youth and agricultural workers. It is critical to the Federal Government’s objective of inclusive growth.”

All that applicants need to benefit from the scheme is apply through their registered market associations and cooperative societies; have a BVN and a mobile phone. The loans range from N10, 000 to N300, 000, tied to applicants’ BVNs. Beneficiaries are expected to paid back within a six month period without interest.

According to the Group Head (Microenterprise) of BOI, Uloma Ike, over 11,861 people have benefited from the GEEP MarketMoni loan scheme and over 583 million naira has been disbursed so far in Kano State alone.

Ike said: “The beneficiaries and representatives of various market associations whose members have received loans will be able to interact with the vice president, talk about the scheme and the impact of the loans on their businesses. It will also be an opportunity for the vice president to experience first-hand, the impact of the programme which today has touched the lives of thousands of beneficiaries nationwide.”

States taking turns


The GEEP MarketMoni interactive sessions had been held in several states across the country. Two of such sessions were in Onitsha, Anambra State, on April 11 and Akure, Ondo State, on May 3.

In Anambra, over 2,000 traders and artisans met with the vice president, the Special Adviser to the President on Social Investments, Maryam Uwais, and the Minister of Industry, Trade & Investment, Okechukwu Enelamah. Top-performing GEEP beneficiaries in Anambra were selected to display their products at the exhibition grounds and to interact with the vice president.

In Ondo State, the vice president interacted with several trade associations including market women.

Speaking on the SIPs, Budget and National Planning Minister Udoma Udo Udoma restated government’s commitment to extend the scheme to everybody.

Senator Udoma said:  “And that is why we have the social investment programme in which we have committed N500 billion every year in the budget, the school feeding programme, the GEEP. So, we have a number of programmes to make sure nobody is left behind”.

Udoma who spoke during the World Bank Spring Meetings in the United States (U.S.), added: “I am very encouraged by the fact that the positives development in Nigeria are being recognised. The positive developments about economic recovery and growth plan, the things that we are doing to encourage investment, make Nigeria more investment friendly, I’m happy that all those are being recognised.

“And the fact that the economy is out of recession and is growing again is also being recognized and the fact that growth is not dependent solely on oil. That there is growth in agriculture and other areas, so it has been a positive meeting for me.”

Mrs. Uwais said the GEEP was designed to offer zero interest rate on loans to over 1.2 million artisans, traders, market men and women, as well as women cooperatives.

She told reporters in Lagos that 70 per cent of MSMEs in Nigeria cannot access loans and financial support for business growth.

Mrs. Uwais said: “GEEP works with cooperatives to assist MSMEs and the Bank of Industry (BoI), manages it by verifying the membership of the cooperatives through BVN. Those who default in repaying the loans get blacklisted and prevented from further access. GEEP targets 1.66 million MSMEs.”

Speaking further, she said THE Conditional Cash Transfer (CCT) has been designed to support one million of the most vulnerable and poorest Nigerians.

The special adviser identefied  economic overdependence on crude oil, absence of critical policies driving inclusive growth and changing demographic profile as challenges that could not be left unaddressed, hence President Buhari’s decision to act.

According to her, the programmes have taken off in 14 states.


A partnerships that works


The BoI and Unity Bank Plc are partnering for the implementation of the GEEP. Under the partnership, Unity Bank will provide account opening services to qualified beneficiaries of GEEP nationwide. These individual bank accounts will serve as channels for beneficiaries to receive loans disbursed by BoI. Beneficiaries will also make loan repayments through these bank accounts. Unity Bank will also provide BVN registration services for beneficiaries who require such, thereby increasing the financial inclusion in Nigeria.

The bank’s participation in the laudable scheme stems from the strategic business objective of supporting MSMEs to access affordable funding.

The bank’s Managing Director/Chief Executive Officer, Mrs. Tomi Somefun, stated that the success of the partnership with BoI is testament to the fact that despite the difficulties of accessing credits by this segment of the market.

She said the good knowledge and understanding of different players in the market segments and ability to harness inherent opportunities for their benefit has continued to differentiate the Bank in line with its strategic business focus on agriculture, retail/SME and rural economy.

According to BoI’s Managing Director Kayode Pitan, the partnership with Unity Bank on GEEP will further enhance access to financial services to qualified beneficiaries and support BoI’s mandate for GEEP loans to reach 1.6 million beneficiaries nationwide.

Source : The Nation

Research Analysis Tools

The fund indexes, institution benchmarks and other market information displayed here are all Symbiotics designed analysis tools, created in-house by our analysts and experts. Symbiotics has one of the oldest track records in microfinance investment analysis dating back to the late 1990s; its indexes and benchmarks have been regularly used as markers by investors, asset managers, financial institutions and practitioners. These, as well as several other research products, are available through the Research Account. Click on the link below to find out more.

Learn More