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Empowering Nigeria’s Economic Drivers, MSMEs, Through Tradermoni by sogoajayeoba: 10:06am On Jan 10, 2019 |
A survey conducted by Liedholm and Mead in 2005 across several African countries, estimates that between 17 and 27 percent of the continent’s labor force was employed in Micro, Small and Medium Enterprises (MSMEs). This figure is near twice the employment of large-scale enterprises and public sector, which means that MSMEs create twice as many jobs as Large-scale enterprises. The United States Agency for International Development (USAID) considers that MSMEs employ a third or more of the labor force in low-income countries (USAID, 2010). MSMEs represent about 90% of the manufacturing/ industrial sector in terms of the number of enterprises yet they contribute an abysmal 1% of GDP in Nigeria compared to 40% in Asian countries and 50% in the US or Europe. Studies by the International Finance Corporation, IFC show that approximately 96 percent of Nigerian businesses are MSMEs compared to 53% in the US and 65% in Europe. Nigeria has over 77 million MSMEs today, employing over 60 million people and contributing about 85% of the total labor force in the country. In fast improving economies in Africa like Nigeria, Morocco and Kenya, over 70% of MSMEs get their initial capital from loans gotten from Micro Finance Institutions and Banks. Nonetheless, 65% of the initial 30% that get their loans from banks will prefer to get subsequent loans from MFIs for two reasons. Firstly, commercial banks have alarming interest rates on loans. For example, in Nigeria, there is a 14% interest on Bank loans and 13.25% in Kenya. Another effect of this difficulty in getting favorable loan rates from commercial banks is that medium and small-scale enterprises have saturated the microfinance services. This makes it close to impossible for micro enterprises to access any loan from the MFBs. A business valued at N100,000 is not likely to access any valuable financial support from either a commercial bank or microfinance house. Microenterprises are not attractive to these traditional lenders. Therefore, many of them remain in a cycle of poverty. With minimal business input, a profit barely enough to survive on is inevitable. The Federal Government of Nigeria is on a mission to break this poverty cycle with a Social Intervention Programme called TraderMoni. Trader Moni is a financial intervention programme targeted at micro traders and artisans. The scheme, which is under the Government Enterprise and Empowerment Programme (GEEP) is structured to offer progressive and interest-free microloans between N10,000 and N100,000 to two million petty traders and financially excluded Nigerians. The objective of TraderMoni is to lift two million beneficiaries at the base of the economic pyramid above the poverty line. As MSMEs expand, they require long-term credit in ever-increasing amounts to upturn their working capital and profit margins. With FG’s Trader Moni effectively filling the void and making these financial support services available to demography that consists of a majority of the country’s labor force, Nigeria’s economy is technically set for a spike in figures and standard of living for millions of the nation’s citizens. 1 Like 3 Shares |
Re: Empowering Nigeria’s Economic Drivers, MSMEs, Through Tradermoni by Adeola602: 10:29am On Jan 10, 2019 |
Well said Sir Sogo sogoajayeoba: 1 Like 1 Share |
Re: Empowering Nigeria’s Economic Drivers, MSMEs, Through Tradermoni by hadassah701: 10:41am On Jan 10, 2019 |
Keep up with the good work. Nigeria is unto next level things |
Re: Empowering Nigeria’s Economic Drivers, MSMEs, Through Tradermoni by Aleeshaa: 10:43am On Jan 10, 2019 |
The initiation of this scheme is a welcome idea. MSMEs is more populated than other sectors, at least those in that sector can get assistant with ease through tradermoni. Impressive. |
Re: Empowering Nigeria’s Economic Drivers, MSMEs, Through Tradermoni by Adesusu7: 10:43am On Jan 10, 2019 |
I am beyond convinced that great results will come out of the initiative, we are moving to the next level. |
Re: Empowering Nigeria’s Economic Drivers, MSMEs, Through Tradermoni by mandyigwe: 10:43am On Jan 10, 2019 |
Well written. The TraderMoni scheme is actually tackling the challenge of insufficient funds in MSMEs across Nigeria leading to a widespread strengthening of the economy at the base of the financial pyramid #tradermoni |
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