Nigerian fintech startup Moni is a community-powered digital finance platform for African SMEs and consumers that leverages the concepts of social trust and group responsibility in order to offer a range of financial services to those who otherwise would not be able to access them.
Founded in 2021 by Femi Iromini and Adedapo Sobayo, who had previously studied together and collaborated on various projects, Moni has developed a platform that provides a range of financial services for SMEs and consumers, including working capital, savings and insurance.
The startup has built a risk engine that combines financial data and business performance with social intelligence, to make it easier for African SMEs to access the working capital they need to scale. Users can access Moni’s services via iOS and Android apps, WhatsApp, and other digital platforms.
A participant in the W22 batch of the Y Combinator accelerator, Moni began with an informal loan arrangement with a family friend who had to start a small business after she lost her job due to the impact of the COVID-19 pandemic.
“The business was doing very well and she had expanded to a second location within a short space of time, but there was a constant need to provide working capital to support her as it was virtually impossible to access it from anywhere else,” Iromini told Disrupt Africa.
“She introduced us to a group of business owners who confirmed that this challenge was universal – access to working capital was hampering their business growth and existing banks and fintechs had not been able to help them. The group of business owners proceeded to ask if we could extend the same loan arrangement we had with my cousin to them as well. They proposed a seven-day loan cycle and an interest rate, and asked my cousin to vouch for them, which she did.”
Iromini and Sobayo had no plans to start Moni at that point, yet the group kept messaging them and even created a WhatsApp group to carry on the conversation.
“We finally decided to take a chance on these business owners with the assumption that whatever money we gave them was never going to come back to us. Myself and Dapo did some basic KYC, created a Google form to manage the information, and reluctantly disbursed the first set of loans from our own personal bank accounts,” Iromini said. “To our surprise, the group were the ones chasing us for our bank details to pay back the loans ahead of the agreed deadline. This initial success persuaded us to run the process again and the group consistently paid back their loans on time and in full.”
These consistent repayments continued for a few weeks until one of the group members was 15 minutes late in repaying their loan.
“To our surprise, that person was removed from the WhatsApp group and barred from accessing loans from us until further notice. Their argument was that they finally had access to the working capital they had been craving and they were not going to let anyone spoil this opportunity for them. This moment of self governance was the “eureka!” moment that made us think we could actually be on to something with a community-based, trust-powered financing model.”
The co-founders ran a successful pilot, and Moni has gone from strength to strength from there. The startup has disbursed more than 11,000 loans with more than US$5 million in loan value. Ninety-two per cent of the startup’s customer businesses use Moni at least four times a week, with a 99 per cent repayment rate. Its income has increased by 50 per cent month-on-month thus far.
Iromini believes Moni’s success stems from its “very different approach”, with its community finance model creating a sustainable system where business owners with a good social reputation can join a lending cluster with an invite from an existing Moni user. Once eligibility has been confirmed, they can access financing in three minutes via their mobile phone.
“This business strategy simply increases the availability of loans for SMEs by drawing inspiration from the importance of community, particularly in emerging nations where the bulk of the population is unbanked and has no credit rating,” he said.
“Businesses that are part of the Moni community can also provide accounts, savings, insurance and other financial services to their customers.”
Aside from YC, Moni is funded by a host of equity investors and debt partners, and is already active outside of Nigeria. It has operations in Benin and Guinea Conakry, but is actively exploring further opportunities to expand across Africa.
“We make money by charging a small interest rate on the loans we disburse and from transaction fees when users transfer money within our network. We also receive commissions from third party financial products like insurance,” said Iromini.
