The GEEP Scheme is one of the social intervention programmes, comprising TraderMoni, MarketMoni and FarmerMoni. It is executed by the BOI, and is a completely digitized programme where all eligible traders are captured into a database, verified via phone and facial recognition technology. They thereafter receive disbursements in mobile wallets.
These scratch cards were developed by the Bank of Industry (BOI), because most beneficiaries of the scheme did not have access to banks. The nearest bank to some of the markets was sometimes 20 kilometres or more. As such, collection channels with wide coverage were required to drive collection.
The new method of repayment leverages vouchers or scratch cards sold at key cluster/ market locations with high numbers of petty traders. The cards are loaded the same way Telco recharge cards are loaded. Loading the card automatically credits the beneficiary’s loan account and updates their loan position.
The GEEP team successfully launched the TraderMoni repayment scratch cards in January 2019.
Roll-out of the scratch cards started in 2019 across the country
Also, beneficiaries can pay back their loans at any commercial bank in the country through the PayDirect platform. The BOI explains that all a beneficiary has to do is walk into any bank and tell the Teller they want to pay their BOIGEEP loan.
The beneficiary should then give the Teller their phone number and the repayment amount. With this, beneficiaries now have options for repaying their loans.
In addition, based on the success of the scratch card pilot, BOI has rolled out similar voucher/ scratch cards for MarketMoni loan repayments. MarketMoni loans start at N50,000 and are for traders with significantly more inventory size than their drive repayments.
The attraction is that whereas the loan starts at N10,000, beneficiaries who pay back automatically qualify for N15,000. Those who pay back their N15,000 qualify for N20,000 and those who pay their N20,000 qualify for N25,000. Ultimately, beneficiaries who pay back the N25,000 get migrated into the N50,000 MarketMoni programme.
Over the course of this journey, successful beneficiaries would have received up to N195,000 in affordable credit hitherto unavailable to them and their businesses. BOI recognizes that there is a higher risk of default as a beneficiary climbs up the ladder. However, to mitigate this risk, the GEEP team has introduced a new requirement for accessing the N20,000 TraderMoni loan: a bank account and BVN.
This helps the programme to achieve two broad goals: Financial Inclusion and repayment compliance. While financial inclusion is easily understood – seeing as a significant portion of the 36 million financially excluded Nigerian adults are petty traders and artisans—the new concept of using the BVN as digital collateral to drive repayment compliance, if well implemented, is expected to have a positive effect on repayment.
Criteria/Eligibility for MarketMoni loans
To be eligible for these Loans under the GEEP Scheme, the applicants must meet with the following criteria, which are shown below:
- Must have a bank account
- A Bank Verification Number (BVN)
- Must belong to a market association or cooperative society.
TraderMoni and MarketMoni are two of the three interest free, collateral free products under the Government Enterprise and Empowerment Programme (GEEP) executed by the Bank of Industry. The third interest free loan program, FarmerMoni, is targeted at farmers within farming clusters. Each FarmerMoni loan goes from N100,000 to N300,000 depending on the crop being cultivated.
TraderMoni loans, which range from N10,000 to N25,000, do not require any collateral for beneficiaries to participate. However, TraderMoni beneficiaries are required to have a mobile phone and must be active petty traders in a designated cluster/market location. This collateral-free approach goes against conventional ‘loan wisdom’. As such, critics of the TraderMoni programme often base their arguments on the feasibility of repayments and the sustainability of the program. BOI, in its responses, has often cited the government’s preference for a carrot approach to achieve high repayment.