Moni is pioneering a community finance model in African communities to improve access to loans and other financial services for local small business owners
Moni, a Y Combinator-backed startup launched its community-powered loans to help market traders, spare part dealers, textile traders, and other small business owners in Africa to access the working capital needed to scale their businesses.
The startup launched a pilot program leveraging the power of local communities for business loans in 2021. At the time, 3,000 mobile money agents were involved. The loan model proved successful, bringing over $22 million in loans to 11,000 SMEs in 2022, with a 99% repayment rate.
Therefore, the fintech expands its community-oriented services to wider use across more regions of Africa. Starting with Nigeria, small business owners with a good social reputation can receive an invite from an existing Moni user and join a lending cluster. They don’t need a collateral to get a business loan, only good social standing and commitment to repaying their loans.
The company provides a risk engine that combines financial data and business performance with social intelligence in a more effective credit decisioning model serving unique financial needs of African SMEs. The eligible businesses can access financing in 5 minutes or less.
Once the loan is disbursed, the lending cluster shares responsibility for the loan, and all its members can access funds from an automated savings pot to bail out other members if needed.
Moreover, borrowers can eventually unlock higher loan amounts based on their payment patterns, e.g. when they repay their loans on time. Thus, a new business registered on Moni can access up to N100,000. Subsequently, its on-time repayment increases the loan eligibility to up to N3 million.
Moni gives loans to all types of local SMEs. However, mobile money agents enjoy the benefit of accessing loans within the app. Other businesses should visit the fintech’s website to apply for a loan.
As we have previously reported, SC Ventures partnered Yabx to expand credit access in Africa.