How did Moni start?
Dapo and Femi reconnected in 2019. They agreed to build something together. Both had experience in consumer finance and financial inclusion, but they did not know exactly what type of project they would launch together. Around 2020, Femi met Temirire, a small business founder who had lost her job. She decided to go into business as a mobile money agent, and Femi invested in her. Each week, as her business progressed, so did her capital needs. Femi asked Temurari for introductions to other women agents. Temirire arranged for a meeting with 4 other women that similarly to her, were working as mobile money agents, had no access to finance, and were operating in villages located far away from any bank branch or ATM.
The problem that Moni(*) is solving mainly is the lack of liquidity, and more concretely the lack of cash. Being an individual money agent is – from a lender’s perspective – a risky business, i.e. “not a sure thing”. Banks told Temurari that they couldn’t help her meet her financing needs. Femi made an initial low-interest loan of USD 1,500 to a group of mobile money agents. They arranged all their communications via a Whatsapp group and agreed to the repayment one week later by 4 pm. All of them repaid their loans. Femi saw a business opportunity so he lent again the money several times over the next months. Femi started a manual system to keep track of the loans, some basic Know Your Client, and underwriting tools.
Everything kept working as foreseen for a couple of months. One day, when repayment was due, a woman was late by 15 minutes. The other women in the group removed her from it. The reason behind such drastic measures is that the whole joint liability/accountability plus the strong reputational and cultural ties among such women result in that one failure could imperil the whole community’s effort.
Femi and Dapo joined forces. They took the time necessary to get to know their customers well and learn more about the product that needed to be developed. Paying attention to what the agents did. In the meantime, they disbursed over 1,000 loans manually. Finally, around mid-2020, they launched the first version of the product.
Which are the features?
- Of course there is group messaging, nevertheless it is not about the messaging itself, but rather about allowing to manage group accountability.
- Transparency is critical. To allow the members to know how much each of them is borrowing, terms, repayment dates, etc.
- Solving the liquidity issue. 9 out of 10 agents face liquidity issues. They need access to credit and cash but are located in places without banks or ATMS. By not having cash, they loose clients.
- Agents make daily reconciliations. They want to understand on a daily basis, how much money they are making. So it was natural for us to help agents keep their records, automating what was previously done manually.
What is next for Moni?
We plan to keep growing the number of agents that we are serving while preserving the low default rate. We have a repayment rate of 99% while having disbursed 5 million loans. We will continue to learn from these agents, from their success stories.
In the next months, we plan to enter other verticals, work more to cater to the needs of SMES.
In addition, we are trying to make it easier for the agents to collect money from their customers.
In sum, we are on a mission to enable groups and communities to meet their objectives.
What is the greatest challenge you are currently facing?
Finding technical talent to help us build our system of solutions. There is a talent crunch and simultaneously a brain drain towards better-paying countries.
We also need more time to capitalize on the benefits of network effects. We have taken a lot of time to develop solutions that meet the real needs of agents and have not spent any money in acquiring customers. We are now past MVP and market fit with over 2,000 monthly clients. We now plan to double down, by keeping up the growth rate of 50% per month. We will do so, while continuing our software development interactions, by increasing automation efforts and moving into different verticals.
Are you happy with your rate of progress?
Yes, we are very excited about what we have accomplished so far. Our business is transformational. It is surprising how much impact you can achieve with $ 200 extra. It was hard for us to foresee that you can do so much when you start with so little money.
We are happy to be building some meaningful solutions for solving critical problems, embracing innovative methods. A major driver for what we are doing is witnessing how it is positively impacting so many lives.
(*) I am an early investor.
“Coming together is a beginning. Keeping together is progress. Working together is success.”Henry Ford