Free Webinar | AI x New Consumer Expectations

Join us on

15 or 16 May 2024

Sign up now

Moni's community-based model redefines access to loans for small businesses in Nigeria

Traditional financial institutions have created a staggering USD 421 billion credit gap in Africa, as SMEs — which represent over 90% of businesses on the continent — struggle to obtain working capital. Moni, a Y Combinator-backed financial services platform, is set to transform access to business loans for African SMEs by capitalizing on community trust and group responsibility.

The Lagos-based startup has introduced an innovative finance model that blends financial data, business performance and social intelligence for more effective credit decisions. The platform operates with lending clusters, which are groups coordinated by a cluster head. Invitation codes from existing Moni users allow small business owners to join a cluster. After submitting details to determine their borrowing capacity, loans can be obtained within minutes.

Moni's pilot program launched in August 2021 and disbursed over USD 22 million in loans to more than 11,000 SMEs in 2022, achieving a 99% repayment rate. Initially targeting mobile money agents, Moni is now extending its community-powered model to a wider array of African SMEs — from market traders to auto repair shops — that are underserved by conventional banking systems. Moni's loans are currently available in Nigeria, Guyana and Benin, with expansions to Cameroon and Ghana in the pipeline.

Trend Bite

As trust is becoming both more fragile and more distributed, social accountability and community ties are essential to creating thriving economic ecosystems. That shift towards decentralization underpins the emergence of platforms like Moni, which leverage the innate strength of local networks to empower small business owners and consumers.

By building on the power of networks and promoting group responsibility, brands can position themselves at the forefront of a new era in business — where the collective force of communities fosters sustainable growth and resiliency. (For more inspiration, check out our NICHE NETS trend briefing on the rise of micro-communities.)