According to the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) the number of MSMEs in Nigeria is at 37 million, employing 59 million persons contributing over 70% of the active labor force. That means over a quarter of our population are involved in small and medium scale businesses. And they are mostly artisans, petty traders and the likes. Of this large number, 43% fail due to lack of funds for daily sustenance or consistent sales and 38% do not grow beyond their initial start-up level. A major challenge of these businesses is they cannot meet the basic requirement of obtaining loans at commercial banks, and even when they do, they do not possess sufficient collateral for these loans. Research shows that the availability of microcredit facilities is one key step to boosting economies of developing countries like Nigeria. Yet this has not been the case, as credit facilities have in most instances been channelled to the high and mighty businesses.
Nigeria’s Vice President, Prof. Yemi Osinbajo is oft heard saying that one the objectives of his administration is to invest in the lives of its people, especially those at the bottom of the pyramid. The visible and rigorous efforts of the initiatives of the National Social Investment Programmes are telling of this intent. The Government Enterprise and Empowerment Programme (GEEP) is one of the schemes of the Social Investment Programmes. Through its sub-schemes, TraderMoni and MarketMoni, financial support is provided through micro lending to micro scale traders. These schemes seek to promote financial inclusion at the grassroots, assisting petty traders with the financial support to conduct their respective businesses. They serve a dual purpose: an economic intervention to drive economic advancement at the grassroots, as well as a social impact project. The implication of this is that these schemes are set to improve the nation’s economy by first improving the daily living conditions its beneficiaries.
Two commonplace errors I have often come across when conversations on Trader Moni come about: one, the notion that 10,000 Naira can barely make an impact in a person’s life, let alone a household or a business and secondly, the possibility of the scheme to have significant impact on a national or global scale especially in the long term.
These notions are evince that the divide between Nigeria’s poor and rich is palpable; that while to some a loan of 10,000 may seem as paltry sum and even useless, to a large number - a silent majority - it may seem synonymous with oxygen. The imbalance in the conversation flows from the fact that those who control the spaces of conversations, those who write history and shape narratives are the elite minority who cannot fathom the logic of the impact of 10,000 Naira to a small business. To them this money would function to simply cater for petrol or recharge card.
The beneficiaries of the scheme mostly do not have a voice. They are not on social media. They do not have smart phones to explain their stories - and even when they do, they are not literate to tell it. They are not invited to the TV stations to comment on the effects of these loans - their best chances at having their voices known is when the Vice President takes a tour to assess the programme in markets. They cannot write opinion pieces on newspapers or blogs. Yet these are the men and women who form the majority - the silent majority.
Whether they have a voice or not, it does not take away their reality. Take for instance Mrs Agbo Mnenna Mercy who heartily shared her growth story of selling basins of corn to trading in bags; to Mrs Anyor Doshima, a petty trader in Wurunkum market, Benue State, who through Trader Moni was able to make an increase in the number of livestock she owned from 50 to 70; to Solomon Ogunwale a trader in Oja Oba market, Oyo State, who has expanded his blending business and has now employed a new staff.
These seemingly little changes in their businesses have culminated in increase in their purchasing power as well as improvements in their living standards, and even nutrition. The enormity of Nigerians in this economic demography is one of the reasons why it is detrimental for this vast number to remain underfunded or unassisted. The scheme addresses a pertinent challenge of citizens in this demography; accessing capital without the added pain of high interest rates and rigid collateral demands which before now, has prevented them from expanding their businesses and employing more labour. The ripple effect of the seemingly little, stretches as far as improving productivity among the disadvantaged population, decrease in inequality as more women are empowered financially, and the improvement in living standards triggering more economic activities across the nation.
The thousands of petty traders who have benefitted from these schemes are proof that they are working. And impacting on the socio-economic lives of its beneficiaries. They are paying back these loans too - to access higher loans to continue the expansion of their businesses. It is not a quick-fix that would end poverty in Nigeria overnight. Like many great initiatives consistency and diligence are needed to ensure that the schemes do not lose track.
It was Confucius who said that he who intends to move a mountain must first start by carrying little stones. The little impact of each loan given to a family adds to the greater impact that Nigeria needs to end poverty, no matter how slowly. With over two million loans disbursed so far, this lifelines have done more for the economy than many can ever fathom.
Akinloye James is the President of the Initiative to Save Democracy.
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