Moniepoint Helps SMEs Process 72 Million Cards Monthly

Shares

Moniepoint Helps SMEs

Moniepoint Helps SMEs Process Cards

The microfinance and fintech company Moniepoint MFB has come up with four recommendations for small and medium-sized enterprises (SMEs) looking to grow and weather the current economic storm. Ahead of the curve, it is prepared to go. This blog post will show you how Moniepoint helps SMEs in this present climate.

Through extensive research and ongoing data analysis, Moniepoint was able to enroll two million enterprises in just five years (2019–2024). Tosin Eniolorunda, CEO of Moniepoint MFB, said,

“To us, the informal economy represents an opportunity to make the kind of impact that people can feel daily regardless of their income level or social status.”

Eniolorunda added, “By quantifying the informal economy’s impacts and nuances, we can better shape policies and programs to empower and uplift the entrepreneurs driving it forward. Their success is inextricably linked to Nigeria’s continued growth and development.”

Key Ways Moniepoint Helps SMEs

1. Local presence: One reason Moniepoint has been successful is that it is accessible wherever its clients conduct business. Because of this, they are now able to access the nation’s financial system and database through banking systems. Many SMEs can now apply for and receive loans thanks to this enrollment.

Financial services became more accessible, facilitating the shift to more established processes for SMEs.

The report observed that “Banking systems provide leverage for many formalized businesses, from payment collection to the ability to perform business transactions at a larger scale. Many of the businesses in the informal economy previously were locked out of these banking systems, so they have been unable to benefit from the advantages that come with being included.

Without a bank account, for example, they are limited to transactions with only people they can physically interact with. This lack of access to banking also impacts them in other ways. Many programs and initiatives from development institutions, including the Nigerian government, exist to support businesses of all sizes in the country. However, with most of the businesses in the informal economy invisible, access to them remains constrained. They also need the requisite documentation to apply for these grants. This means that although opportunities exist, they often cannot access them in ways that can help them grow meaningfully.”

2. Formalization: We were able to address the unique requirements of these companies by designing banking and payment services with them in mind. Many changes to a more structured approach are possible when offering banking services to these companies in accordance with current rules. As a result, they will have easier access to the systemic benefits enjoyed by others with more formal structures.

See also  Commercial Banks: The Backbone of the Financial System

3. Access to Credit: Moneipoint claims to have created a credit assessment system for SMEs based on insights into their financial histories. As a result, it may provide customers finance that is tailored to their need, enhancing their chances of success.

Cooperation with appropriate public and commercial entities.

4. Moniepoint states: “By partnering with government agencies, we’ve made it easier for businesses to obtain the necessary documentation to become formal. Our ongoing partnership with the Corporate Affairs Commission (CAC) allows business owners to register their business names with the CAC directly on our platform. We’ve also collaborated with the Federal Inland Revenue Service (FIRS) to enable these businesses to quickly obtain their Tax Identification Number. Collaborations like this will formalise about 30 million businesses in the next five years.”

The counsel comes through Moniepoint’s The Informal Economy Report 2024. Highlights of the report include the following:

a. N9b (Nine Billion Naira) is available to SMEs as single-digit interest loans.

b. SMEs contribute about 37 per cent of GDP in emerging markets.

c. Experts use various terms for the economy of SMEs, including “underground,” cash-in-hand, and shadow economy.

“By transaction value in Naira, Retail and general Trade, alongside Food and drinks, accounted for over half of Nigeria’s informal economy at 53.6%”.

The constituents are neighborhood shops, restaurants, supermarkets, and those that sell daily necessities.

Characteristics of Nigerian SMES as identified by Moniepoint include:

Average monthly income of less than N250000.
Owners are predominantly aged 25-34 years.
Unemployment is a primary trigger for stepping out.

See also  Who Owns OPay? A Look Behind the Scenes

Eighty-nine (89) per cent pay some form of taxes.
Retail and general trade predominate.
The lifespan of the businesses is usually under five years.

Seventy per cent of SMEs borrow money.
They spend their incomes on feeding and family expenses.

Half of the business owners multitask.
Women own 37.1 per cent of SMEs, and men own 62.9 per cent.

Nigerian SMEs are located in the South-South 19.9%; North-Central 16.8%; South-West 15.6%; South-East 13.2%; North-West 12.8%; North-East 6.6%.

Moniepoint MFB prepared the report with the Ministry of Industry, Trade, and Investments and the Small and Medium Enterprises Development Agency (SMEDAN).

Charles Odili, SMEDAN’s CEO, affirmed that

“small businesses are the engine of the Nigerian economy, and the informal sector serves as the piston that provides momentum.”

He added, “The numbers support this reality, as reaffirmed by this report. Most of Nigeria’s approximately 40 million small businesses reside in the informal sector. They are all around us, from the unregistered beauty shop that began with a simple stool under a tree for customers to sit while the stylist worked her magic to the fruit store that grew from a wheelbarrow.”

Mrs. Doris Uzoka-Anite, minister of industry, trade, and investment, enumerated the many steps taken by the federal government to improve micro, small, and medium enterprise (MSMEs) access to capital. They comprise

The Nigerian government has a N200 billion palliative program that provides micro, small, and medium-sized enterprises (MSMEs) with low-interest loans and subsidies for nano-scale enterprises.

Micro-enterprises can get low-interest loans through the State Enterprise and Empowerment Program (SEEP).

Rural Area Programme on Investment for Development (RAPID) support for micro, small, and medium-sized businesses in economically disadvantaged areas.

Program known as One Local Government One Product (OLOP) that provides grants and loans without interest. Businesses in strategic industries can speed up their expansion with the help of the “GROW NIGERIAN” program.

See also  A Guide to the Capitec Investment Calculator

Fund Management

It is essential for small businesses to have access to and be able to handle their finances.

There was a 70% confidence level among MSMEs about the use of financing. There is an annual unmet financing demand of $5.2 trillion for formal micro, small, and medium enterprises (MSMEs) in developing nations, according to the International Finance Corporation (IFC) research. This estimate includes 65 million businesses. Companies operating in the shadow economy frequently confront insurmountable challenges, making access to financing all the more important. Among these companies, 70.1% have reported using a loan of some kind.

Nevertheless, from what sources may SMEs obtain financing? Friends and family account for 70.7% of the loans taken out by enterprises operating in the informal sector. Other sources include traditional banks (12.2%) and loan platforms (15.1%).

How about the payment? Here we have a paradox in the numbers. Despite the availability of other digital payment collection methods, the majority of in-person payments received by informal economy enterprises (80.2% according to Moniepoint statistics) are made with credit or debit cards.

Frequently Asked Questions on Moniepoint Helps SMEs

1. What is Moniepoint?

A: Moniepoint is a microfinance and fintech company that provides financial services to small and medium-sized enterprises (SMEs) in Nigeria.

2. How does Moniepoint help SMEs?

A: Moniepoint offers a range of financial services, including loans, payment processing, and access to banking systems, to help SMEs grow and thrive.

3. What is the Informal Economy Report 2024?

A: The report by Moniepoint provides insights into the Nigerian informal economy, highlighting the challenges and opportunities for SMEs.

4. What financial services does Moniepoint offer to SMEs?

A: Moniepoint offers loans, payment processing solutions, and access to banking systems, among other services.

5. How does Moniepoint help SMEs access credit?

A: Moniepoint has developed a credit assessment system to provide tailored loans to SMEs based on their financial history.

6. How is Moniepoint partnering with the government to support SMEs?

A: Moniepoint is collaborating with government agencies like CAC and FIRS to simplify business registration and tax compliance for SMEs.

7. What is the contribution of SMEs to the Nigerian economy?

A: SMEs contribute significantly to Nigeria’s GDP and employment generation.

8. What are the challenges faced by SMEs in Nigeria?

A: SMEs in Nigeria often face challenges such as access to finance, infrastructure, and a conducive business environment.

9. How can SMEs benefit from formalization?

A: Formalization can provide SMEs with access to credit, government support programs, and a wider customer base.

Be the first to comment

Leave a Reply

Your email address will not be published.


*