When perceiving a situation as risky, one would always seek ways to reduce the risks. This does not only apply to individuals, but it can also be observed in groups, communities, and even countries. Social protection has been defined in many different ways, but most definitions agree on one thing: social protection is aimed at reducing poverty and people’s exposure and vulnerability to risks.
Social protection includes programmes and policies focused on reducing poverty and risk exposure among the poor and vulnerable, who comprise more than 50% of the population in low-and-middle-income-countries (LMICs).1 LMICs have only just begun to take small steps towards effective and comprehensive social protection systems. However, these steps have been hampered by several bottlenecks, such as discontinuity in governance, inadequate institutional structures, corruption, and economic instability.
Providing social and financial risk protection for poor and vulnerable populations is a major development and policy issue across the globe.2 Several LMICs are now actively pursuing social protection policies and programmes because of evidence suggesting that social protection can have short and long term positive impacts on countries’ vulnerable populations and economies. Unfortunately, in many cases, these countries lack the capacity to implement social protection policies and programmes.
Economic Empowerment in Nigeria
Several administrations in Nigeria have invested in social protection by establishing poverty alleviation and social investment schemes. Some social protection programmes that have been implemented by the Nigerian government since 1960 include:
• Youth Empowerment Scheme – YES
• Rural Infrastructure Development Scheme – RIDS
• Social Welfare Service Scheme – SOWESS
• Natural Resources Development and Conversation Scheme – NRDCS
• Youth Enterprise with Innovation in Nigeria – YouWIN
The above list is not exhaustive, but it depicts the effort of the Nigerian government towards poverty alleviation and social investment. As it usually happens in other LMICs, these schemes are implemented over time, but then, they are ground to a halt in a couple of years due to their unsustainability and lack of solid legislative frameworks. Sometimes they are resumed by the next administration, but oftentimes they are simply discontinued.
The TraderMoni Scheme
The TraderMoni empowerment scheme in Nigeria is a novel government attempt to provide microfinance and complementary economic services through social protection systems. The objective of this programme is to provide small loans to small-scale traders or artisans, groups that usually cannot access loans or credit through banks and traditional financial institutions.
The TraderMoni scheme is one of the arms of the Government Enterprise and Empowerment Programme (GEEP) initiated by the Federal Government of Nigeria on the platform of its National Social Investment Programme. The GEEP was initiated in May 2016. It was created to provide zero-collateral soft loans to traders, artisans and farmers, aiming to improve their standards of living by expanding their businesses. The two other arms of the GEEP are the MarketMoni and FarmerMoni, schemes targeted at market women and farmers respectively.
The TraderMoni scheme was designed to enable self-employed individuals who lack collateral access loans with ease, thereby reducing their vulnerability to risks. TraderMoni allows access to an interest-free loan. The amount ranges from ₦10,000 ($27) to ₦300,000 ($810). After the payment of the first loan, the beneficiary automatically qualifies for a ₦15,000 loan. After paying the second loan, the beneficiary then qualifies for a ₦20,000 loan, followed by ₦50,000 and ₦100,000 loans, until a final ₦300,000 loan. The TraderMoni scheme is meant to help traders grow their businesses steadily by providing these soft loans on a rolling basis, making the next available loan amount bigger than the previous.
Coverage, Disbursement, and Repayment
The GEEP was targeted at benefitting a minimum number of 1.66 million Micro, Small, and Medium Enterprises (MSMEs) on its first run which lasted through December 2018. The TraderMoni arm of the GEEP was designed to fund the smallest of these MSMEs, who rarely have the means to access credit from banks or other traditional means. The Traders are required to belong to a recognized cooperative, guild, or association to qualify as beneficiaries of the scheme so that the government could properly map the target population for the TraderMoni disbursement and use financial technology to facilitate the disbursement. In that sense, having a mobile wallet which is linked to a beneficiary’s mobile number is enough to receive the first batch of the credit. This procedure reduced inaccessibility to the credit to the barest minimum. The repayment is made in small instalments over a period of six months.
The scheme is driven in the field by agents who register the beneficiaries at their point of trade using their biodata, business information, and other necessary info. By early 2019, the TraderMoni scheme already had over seven hundred thousand beneficiaries who had received a credit of ₦10,000 each.
The TraderMoni scheme has been criticized by some political analysts, who stated that the scheme was politically motivated to garner votes in the 2019 general elections. This is perhaps because of its timing; the scheme was initiated a few months before the 2019 general elections in Nigeria. On the other hand, it has also been applauded by a lot of people, with several positive testimonies recorded from beneficiaries.
Through the programme, traders can pool funds together to improve their bargaining power with their suppliers, rickshaw riders could maintain their vehicles and earn more money, etc. LMICs may have only just begun to invest more seriously in effective social protection systems but schemes like TraderMoni are proof that they are doing something. This major step in the right direction can reinforce the importance of social protection in these countries, supporting the development of programmes that are backed by legislation and would enjoy perpetuity beyond administrative regimes.
Aregbeshola, B. (2019). Health care in Nigeria: Challenges and recommendations. Socialprotection.org, 07 February 2019. Access here.
Government of Nigeria (2018). Investing in our people a brief on the national social investment programmes in Nigeria. Access here.
Government of Nigeria. TraderMoni website. Access here.
Hussaini, M. (2014). Poverty alleviation programs in Nigeria: issues and challenges. Access here.
McKenzie, D. (2019). Youth Enterprise With Innovation in Nigeria (YouWiN!) Program Impact Evaluation 2011-2016. Access here.
Okwe, M. (2019). Geep Programme: An empowerment scheme wrapped in opaqueness. The Guardian, 31 March 2019. Access here.
Unknown Author (2019). What really is TraderMoni? The Guardian, 28 February 2019. Access here.