With the bold message on its website, “Grow your POS business with Moni”, a new Fintech company, Moni is solving the liquidity problem faced by mobile money agents through low-interest loans.
Unlike traditional banks, Moni is riding on a community model and is leveraging social trust to give collateral-free loans to mobile money agents to further distribute financial services and products to SMEs and other consumers across the African continent.
“Moni provides financing to mobile money agents using a community model leveraging on social trust,” Moni’s Co-founder/CEO, Femi Iromini, said.
Agency banking, a branch of mobile payment is the central bank-led Shared Agent Network Expansion Facilities (SANEF) initiative.
With millions of Africans still excluded from the formal financial ecosystem, agency banking is closing widening gaps between yesterday’s and tomorrow’s consumer banking needs, reaching the unbanked population and removing long queues at bank branches and Automated Teller Machines (ATMs).
EFInA’s 2020 access to financial services survey showed that for the first time there was a significant increase in the percentage of the Nigerian adult population using agency banking.
“For financial inclusion, bank branches have never been the answer,” Ashley Immanuel, CEO of EFInA, the firm that conducts Nigeria’s biennial financial inclusion survey states, adding that it makes sense for banks to shift to more branchless options both for the sake of the banks and their customers, particularly for the low-income customers.
Banks find it expensive and unprofitable to open branches in the excluded communities with fewer economic activities.
While agency banking is saving the day, the lack of access to credit from traditional banks is preventing mobile money agents from efficiently running their business.
“Unlike traditional institutions, we do not require traditional collateral upfront to provide an agent with a loan. With us, the required collateral is people in your community, who know and trust you and in a good word for you,” Moni’s Co-founder, Adedapo Sobayo, said.
Read also: High mobile phone ownership present opportunity to reverse Kaduna’s financial exclusion – EFInA
Moni operates as an expanding invite-only network were all new users are invited and guaranteed by existing members to access financial services like credit, insurance, and more, the founders explained.
“It is in the interest of each member to maintain their social reputation while taking a joint liability for every credit facility taken by each of the members,” they said.
The concept of social trust is an age-long concept in Africa where members of a community come together to influence support for other members in need within the community. Moni has restructured this through technological innovations that would positively impact the lives of the lower class in Africa.
Moni in the last 12 months had grown from servicing three Mobile Money Agents to servicing over 2000 agents across seven states in Nigeria and The Republic of Benin. There is a target to service 10,000 agents before the end of 2022 through its expansion plans to enter three other West African countries.
Following the intervention of Moni, the mobile money agent community it serves continues to grow in terms of the transaction, a turnover which in turn improves not only the economic condition of the agents but their communities.
Moni is among the six African startups that were recently confirmed as participants in the W22 batch of the renowned Silicon Valley-based Y Combinator accelerator.
