• Tuesday, May 21, 2024
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BusinessDay

GEEP: Impact of micro credit on businesses

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In March 2015, an ‘akara’ balls seller at Orile in Lagos needed ‘just N10,000’ to expand her business. Jane Odukola had been in the business for four years. For her, any additional capital would help her fry more ‘akara’ balls for insatiable customers. With little amount of money, she could get a bag of beans, rather than a half, and produce more balls.

Luckily for her, one Good Samaritan was handy to provide succour. The woman, a then civil servant in Lagos, gave her N10,000, promising to give her more if she saw progress.

Odukola did not disappoint. She bought a bag of beans and when the Good Samaritan saw appreciable level of progress, she gave her another N10,000.

Today, the rest is history. Odukola now has two spots where she fries ‘akara’ balls. She has a son she trains at the university and plans to get another place to capture another segment of customers in her area.

As small as the amount was, it was able to push Odukola on. Micro credit may be small, but it can catapult a trader into success if well managed. In many cases, managing the credit may be difficult due to changing economic circumstances, but once that phase is crossed, several positive things follow.

The Government Enterprise Empowerment Programme (GEEP) was launched in 2016 with the aim of offering interest- and collateral-free credit to the millions of micro businesses like Odukola, operating at the bottom of the Nigerian economic pyramid. The programme leverages three loan products such as MarketMoni, TraderMoni and FarmerMoni in supporting micro traders.

It was set up to start the economic revival from the bottom of the pyramid by providing access to credit for Nigerians who contribute to the economy but have been neglected over the years. GEEP has all together provided loans ranging from N10,000 to N300,000 to petty traders, artisans, small businesses and farmers. This has seen 2.4 million Nigerians significantly receive boosts to their businesses. GEEP has been implemented in 36 states of the federation and the FCT with a spread of over 2,600 market clusters.

“Little interventions like that might seem small, but the impact on an ‘akara’ balls seller, ‘moi-moi’ seller and other petty traders can be unimaginable,” Ike Ibeabuchi, an economic analyst, said.

GEEP has also risen to support micro businesses hit by COVID-19 lockdown measures. Through the scheme, they are able to access micro funds that will enable them to stay afloat. About 87, 614 micro businesses benefitted from the COVID-19 intervention loans in the first phase. The second phase of the loans is disbursed to 412,368 traders across the country to boost their productivity and ease the impact of lockdowns on them.

The programme has become necessary owing to local and global fundamentals. While poverty is deepening across the world, governments commit little resources to cushion its effects due to their faltering fiscal positions occasioned by COVID-19 and oil price lows.

In Nigeria, a recent report done by the National Bureau of Statistics (NBS) said that 82 million Nigerians live on less than $1 per day, representing 40 percent of the population. Other reports put the number of Nigerians living in want at 87 to 100 million. The majority of Nigerians in this class are petty traders whose capital is below N10,000.

The Federal Government is not living in denial, which is why it introduced GEEP to reduce poverty and unemployment while improving livelihoods.

A lot of micro traders who have benefitted from the programme are testifying that the process of getting the loans is seamless and that the loans are lifting them out of poverty.

Makinde Helen sells palm oil at Oja Bisi market in Ekiti State. She had been in the business for over 10 years before having an encounter with the GEEP team. Until GEEP came, she had been making little profit from palm oil because she sold in small portions. But GEEP came and put smiles on her face.

She got N10,000, which has helped her get two extra kegs without having to buy on credit. She is hoping to get more after paying back.