Tradermoni, a federal government initiative aimed at supporting petty traders across Nigeria may fall short of its secondary target to reduce financial exclusion.
The federal government initiative which has disbursed more than N12 billion in loans to a total of 1.2 million people may have so far not contributed to reducing the 36.6 million Nigerians who are financially excluded.
Investigation by BusinessDay across four markets in Mushin, Ketu, Abule-Egba and Ikotun revealed that the beneficiaries of the loans had no intention to operate their bank accounts after they withdrew the N10,000 deposits.
Popularly known as Iya Sikiru, a trader at Mushin market who sells orange, mango, plantain, water melon, pineapple, etc, depending on the season when the various items are harvested, while commenting on her future plans for the account opened to collect the Tradermoni loan said “I will go and continue using the account when government put another money there for me.”
This was affirmed by Bose Akeredolu, a fish seller at Ikotun market as she said “what will I go and do at the bank, there is always a lot of form to fill and I am not educated, plus bank will not give me loan but my meeting people will give me.”
Meanwhile, Uzoma Nwagba, the Chief Operating Officer of GEEP in an interview with BusinessDay said they are quite pleased with the results so far.
“Over half of our 1.5 million beneficiaries are first-time operators of bank accounts or mobile wallets. And we see them use those tools even after the loans, and this encourages us. We are committed to targeting everybody who is not financially included,” Nwagba mentioned.
He explained also that they admit it is going to be a long journey to bring Nigerians and micro-enterprises that are financially excluded or under-included into the financial space, “however, we are also conscious it is an ecosystem so we don’t need to interact with everybody; if it works well for different cohorts of people, it will become contagious.”
Read also: Leveraging the art to deepen mother tongue, creativity through music
Meanwhile, the central bank of Nigeria has target to include 80 percent of the country’s adult population into the financial cycle by the year 2020.
Some of the challenges that drag the country’s inclusion rate include but not limited to; lack of incentive to open a basic account due to high cost of maintenance, low income and purchasing power, high illiteracy rate especially in the northern part of the country and proximity of financial service providers to some rural dwellers.
“You cannot achieve financial inclusion via marketing campaigns or market storms, asking people to open bank accounts. You have to give them a strong incentive to do so, and to continue to operate the account. GEEP has been able to achieve this. I call it the convening power of capital,” Nwagba explained.
Another trader who got her Tradermoni loan from an agent at Ketu market responded on the condition of anonymity for the fear that she may not get any future loan disbursement if she is quoted mentioned that “it was an agent that helped me get my money, I was not told anything about a bank account, but they said there is mobile wallet.”
When BusinessDay asked her if she will continue using the mobile wallet through which she got the loan, she said no, this is because “I don’t know anything about the mobile wallet, I have never used it before and no one showed me anything, all I just wanted was to get my money.”
Nwagba told BusinessDay in a recent interview in Lagos that GEEP removes the first critical barrier to financial inclusion, which is the barrier of engagement.
“We give you a strong reason to want to try. You can only get our loans by opening a bank account or operating a mobile wallet. You can only repay via the bank or vouchers, no cash. You can only access the next one on your mobile phone. We combine this with increasing investment in communication and education,” he said.
Meanwhile, Akeredolu said she has no plans to repay her loan as it is her own share of the Nigeria national cake, “I have never gotten anything from the government, I am hopeful that they will bring another one.”
This was the same opinion of Iya Sikiru as she said she prayed for a day like the day she got the N10,000 and “I will continue to pray to God to send another person that will give us small loan.”
The story was however different for a trader at Ojuwoye market, as extortion and other corrupt practices in the process of obtaining the Tradermoni loan cut her off from receiving it.
Owing to their lack of account holdings with banks, some were forced to strike a 50/50 deal with agents to receive N5, 000 while others had to consent to a 70 to 30, 90 to 10 and worse of all 95 to 5 sharing formula
Enumerated in September 2018, Muyinat Ajibulu received a message congratulating her that her loan was ready for collection around 3:17pm on October 11 from Aku, a mobile money outlet assigned to manage the disbursement process of the loan. In the message were instructions on how to get the N10,000.
But shockingly, she received another message notifying her of fund transfer to a strange account two hours later and that was the last she saw of the loan.
“Others have received the money and are rejoicing. I want to rejoice as well. With it, I can buy a bag of salt at N3500 and gain almost N2, 000 from it. I don’t plan to return any money. I may when I get the next one,” she explained.
Nwagba, the COO of GEEP said that they are aware of those instances and are taking the necessary actions “with a programme of this scale, targeting a segment of the population that is highly uneducated, we know that some people would try to exploit the process and take advantage of unsuspecting beneficiaries.”
He further explained that “we have even seen instances of people who do not work for the programme, walking into a market with mobile phone tablets and posing as TraderMoni agents. They charge N200 per person who comes to have their data and picture “captured,” whereas this is all just a show.”
Non-collateralised loan is what the government says it is but on the market streets of Mushin, Ketu, Abule-Egba and Ikotun among others, the common impression is that the money is free and synonymous with the “stomach infrastructure concept”.
Out of the 2 million people targeted by the year end, Laolu Akande, the spokesman to the Vice- president said about 500, 000 people have been paid, with almost 200,000 bank accounts opened during the course of the programme.
He debunked the widespread account that the fund is neither a product of Abacha loot nor a strategy for inducing political sympathy towards President Buhari in the 2019 elections.
“The specific Abacha loot is $322 million that was returned from Swiss government to us. But this is targeted at conditional cash transfer. The social intervention of the Buhari administration has four categories and there is the conditional cash transfer where we pay N5,000 per month to the most vulnerable and poorest among us,” he said.
