Nigerian fintech startup Moni, which leverages social trust and group responsibility to deliver financial services, has launched a new range of business loans that enable small business owners to take advantage of the power of their communities to access working capital.
Moni is pioneering a community finance model that builds on the importance of group responsibility in African communities to improve access to essential financial services for small business owners across the continent.
The startup 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 a 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.
The Y Combinator-backed startup launched the pilot of its community powered loans in August 2021 with 3,000 mobile money agents, and in 2022 alone disbursed more than US$22 million in loans to more than 11,000 SMEs, with a 99 per cent repayment rate.
The company is now building on the success of its community-powered model to deliver game changing financial services to a wider range of African SMEs who have previously been underserved by the traditional financial system.
“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. 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.