How Buhari’s social Fund For MSMEs Attempts To Bridge The ‘Credit Gap’

The big companies get all the banking credit in Nigeria, with the top 100 companies in the country said to corner 90 percent of banking credit. If you are small business, you have a small chance of accessing credit. This credit gap between the big and small business is what President Muhammadu Buhari’s Government Enterprise and Empowerment Programme (GEEP) is seeking to bridge.
Unable to access finance from the formal sector, businesses in the informal sector have always struggled. But this may be changing with the progress being reported by the GEEP initiative.
GEEP is one of the National Social Intervention Programmes (NSIP) of the current administration, providing interest free-loans of between N10,000 and N100,000 to market women, farmers, artisans and enterprising youths nationwide through the Bank of Industry.
GEEP is targeted at developing Micro, Small and Medium Scale businesses and now claims to have reached over 400, 000 beneficiaries in the last two years of its operation. This was disclosed by the Project Lead Toyin Adeniji, who said the initiative remains a benchmark for funding MSME across the globe.
Adeniji, in a recent chat with the media explained that to be a beneficiary of GEEP and access MarketMoni loan, as the programme is otherwise called, the first step is to have a bank account with BVN. “Would-be beneficiary must also belong to an accredited market association or cooperative registered in your state or with the CAC. Thirdly, your association or cooperative must indicate its interest in MarketMoni by submitting its information to BOI including its certificate of registration.”
“If your association or cooperative qualifies, a MarketMoni agent would be sent to your group promptly to capture your members for loan assessment. It is as simple as that.”
Explaining what GEEP is out to achieve, Adeniji said: “GEEP Market Moni is an initiative designed to support small businesses in markets across the country. Access to finance constitutes a major issue in developing world, Nigeria in particular. But in the last two years, GEEP has grown into one of the largest MSMEs support initiative in the world.”
She further explained that the administration of President Buhari, in its resolve to support and accelerate economic activity of MSMEs, the federal government, established GEEP which is also called MarketMoni, because of the loans it gives out. According to her, GEEP gives beneficiaries interest-free loans to market women and traders, artisans, youth and farmers. “Many of us for this palm oil business fit buy only on keg. As dis government loan come, we dey buy 3 or 4 kegs. Business dey move” Mrs Oluwawomi, a palm oil seller and one of the beneficiaries of GEEP on Osun state said.
Vice President Yemi Osinbajo has been driving the GEEP programme across the country and has been holding Micro, Small and Medium-Scale Enterprise (MSME) Clinics in different parts of the country to sensitize Nigerians about the scheme. Speaking at Edo State’s edition of the MSME Clinics during his two-day working visit to the state recently, Vice President Osinbajo disclosed that over 4,000 people have benefitted from GEEP in the state.
“The federal government of Nigeria, through Bank of Industry has empowered over 4,000 Edo state people with loans, and 350,000 persons have so far benefitted from the programme nationwide”, he said
Osinbajo explained that “the policy of the Federal Government is to sup¬port businesses, not just big business but particularly small, medium-sized businesses and microbusinesses.
The whole idea is that we want to ensure that we give whatever support whether it is cash, advice or even registration to all of our small and medium enterprises.” He also disclosed that the federal government has concluded plans to roll out TraderMoni scheme, a new micro-credit scheme to cater for ultra-micro enterprises in addition to the existing GEEP MarketMoni scheme, which targets market women, traders, artisans and enterprising youths.
TraderMoni, he explained, is a different scheme from MarketMoni because TraderMoni is for the smaller traders. These are the hawkers; those who are doing little things where in many cases their inventory, the whole thing they are selling is sometimes not even more than N5, 000 to N10,000. We want to give those kinds of people some credit as well and once they pay back, we will give them some more money.
“I thank the president for this loan. I collected N100, 000 and it was very quick. I got a new machine, said Edith Nwosu, a tailor in Anambra state.
The GEEP programme covers the 36 states of the federation.
Uzoma Nwagba, GEEP MarketMoni Chief Operating Officer, explained that GEEP is geared towards addressing one of the tough challenges of microenterprises in Nigeria, which is access to finance. Nwagba, argued that the pro-poor programme would improve the economic wellbeing of the beneficiaries as well as inflate the economy from the grassroots.
Toyin Adeniji, the Executive Director of Financial Inclusion in BOI, added that the pilot phase of the TraderMoni scheme has already began, with 368 traders in Edo State, each walking home with N10, 000 after the event.
She said BOI is making every effort possible to enhance the scope of the program and bring in more beneficiaries. She explained how the programme has impacted positively on the economic status of the beneficiaries to include improvement in businesses, job creations among others.
“Beneficiaries of the GEEP loan have been able to improve their businesses. Some of them from a one-man shop now employ six people; those who buy things in small units now buy in bulk. It is a very aggressive scheme and we have a target to reach over a million. As at now we have disbursed loans to over 350,000 beneficiaries nationwide, and to scale up the scheme, we have identified and categorised a new group of micro traders who need only about N10,000 to boost their businesses.”
“GEEP MarketMoni loans are repayable over a period of 6 months with a five percent administrative charge. To ensure that the loan instalments are paid on time and conveniently, collections begin from the third week after loans are received. Beneficiaries enjoy a two-weeks grace period”, she added.
To assess the impact of the scheme, Vice President Yemi Osinbajo, in May met with a section of about 12,000 beneficiaries from Kano State during the state’s edition of MSME Clinic. Speaking at the event, Special Assistant to the Vice President on MSME, Tola Johnson, said “The best thing that has happened to micro businesses in Nigeria is the GEEP MarketMoni programme.
It has dealt with their collateral challenge because all they need is their data, a bank account and Bank Verification Number (BVN).”
Explaining the rational for the scheme, Johnson said that out of the 37 million small businesses in Nigeria, 36.9 million are microenterprises. “This informed the Federal Government’s attention to this space. Micro enterprises are responsible for almost 50 per cent of the country’s Gross Domestic Product and 80 per cent of the workforce.” Most of GEEP beneficiaries are women, some of whom are widows and single mothers. The programme is improving the quality of their lives, their children’s lives, their health and even education.
Speaking with journalists in Kano, the Head of Agent Networks, Sherifat Abdullahi, who interacts directly with agents, association heads and the beneficiaries said, “Apart from the 350,000 direct beneficiaries across the country, it has created employment opportunities for over 5,000 Nigerians who act as MarketMoni agents, some of whom are graduates, previously unemployed.” Sherifat added, “As someone who has direct contact with the beneficiaries, this has been a very emotional journey for me, watching how this interest-free loan scheme is changing the lives of people, especially women and the vulnerable. We truly appreciate the Federal Government for doing this.”
The National Bureau of Statistics reports that there are at least 37 million MSMEs in Nigeria, 85 per cent of which lack access to funding. It is in a bid to address this challenge head-on that the President Muhammadu Buhari-led administration established MarketMoni – the Government Enterprise and Empowerment Programme (GEEP), a social intervention programme aimed at reinvigorating the economy at the base of the pyramid, the hotbed of Nigeria’s financially vulnerable.
To benefit from the scheme, applicants just need to apply through their registered Market Associations and Cooperatives, have a Bank Verification Number (BVN), and a mobile phone. The loans range from N10,000 to N100,000, and are expected to be repaid within a 6-month period without interest.
Apart from GEEP MarketMoni, the three other Social Investment Programmes embarked on by the Federal Government include the School feeding programme, Conditional Cash Transfer to less privileged and N-Power.