Making the link – Social needs to finance access

It is a popularly accepted ideology that the solutions to any challenge must come from within. The same must be the case with the burgeoning poverty crisis that Nigeria faces on a daily basis. Our appalling poverty indicators are well known. Over 70% of its 170 million population are poor living below $1.25 a day. Many employed and unemployed make a living owning small or medium enterprises. This character is not limited to the uneducated. 

Nigeria churns out graduates from tertiary institutions with little or no job waiting for them in the labour market. According to the National Bureau of Statistics, over 50% of youth in Nigeria are jobless even as the World Bank estimates 56% of Nigerian youth are jobless. However, InnovationMatters, based in Lagos, has committed to look within its resources to find solutions to draw people out of poverty and to provide people with growth options to help them and their families out of poverty. This is the reason why InnovationMatters has committed its profits to providing solutions to fund access to women and groups who share the same goal to provide economic empowerment to families. 

What we are doing? What impact are we creating? 

Predictably, clients who work with InnovationMatters are those who need funds the most – low income earners, youth looking for job opportunities and micro and small business owners- especially those who have a drive to sustain their families but are not equipped with the business skills to grow their businesses to success and meet basic family demands. 

InnovationMatters’ first obvious solution has been to provide business skills and options. In today’s world, there is massive business support to micro small and medium enterprises. However, InnovationMatters has observed that a number of these support are targeted at the literate population, which are 56% according to the ….. InnovationMatters has taken the lead in this regards by reaching out to the … group who mostly make up the number of the unbanked in Nigeria, to provide business support services. The most effective model they have applied has been to map needs; engage in conversations that create enterprise opportunities; and provide financial solutions. Through relationships established through different mentoring platforms, InnovationMatters has provided support to support different challenges from business ideas, growth and expansion to school fees and house rent. 

Within a few months of their commencement, InnovationMatters has already begun to record results. With over N3.5million worth of private funds, InnovationMatters caters to reached 15 groups; over 70 women beneficiaries within 7 communities and has impacted on over 280 dependants within a few months. What was designed as an experiment to contribute to the poverty eradication, has grown by phenomenal proportions. Financially, the demand for InnovationMatters’ support has growing at 60% per quarter with a repayment rate of 97% so far. 

How we are creating impact 

Grant making to micro small and medium enterprises is not new in Nigeria. Despite developing an appropriate policy and regulatory framework for the operations of MFIs in Nigeria, some studies have revealed that the number of beneficiaries of microfinance banks is an insignificant proportion of the people in need of microfinance services. Notwithstanding the modest gains recorded by MFBs in Nigeria, the poverty challenge in the country remains daunting such that many of the disadvantaged and economically active poor remain financially excluded and still experience real challenges in accessing loans and generating enough income to repay loans when they do receive it. 

Although these are daunting challenges, InnovationMatters navigates its relationship with clients by establishing trust portfolios. In the informal sector this means making collateral free loans, eliminating stringent registration processes; and encouraging flexible repayment patterns and lowering interest rates. Each portfolio advocates teamwork and team support in the informal sector. 

A report from one of their clients referred to how teamwork facilitates benefits for the entire group. “Do you know how it has worked for us? We make sure we are live around the same area and support each other in our shops. So that if anyone wants to buy rice they know they come to me. We encourage each others’ business. Now with this loan, we direct people to each other’s shop so that we all grow together and this is really working for us…” 

Team work has strengthen most groups’ economic situation. Widows Development Support Services (WADSS) first obtained a loan from us to help women who were heads of household and were solely involved in bringing up their children without the support of a spouse or partner. WADSS members work in churches and sell light refreshment. After a mentoring session with InnovationMatters, th group took advantage of events that attract millions of pilgrims and WADSS used the opportunity to cater for people and to generate a joint income of which profits are shared. From buying small items for sale, WADSS buys truckloads of drinks from the company to sell at these large events. 

CashAccess gave these women to create this opportunity. 

WADSS operate in Simawa Town in Sagamu Local Government in Ogun State, Nigeria, home to some of the poorest people with 57% of the people living below the poverty line according to National Bureau of Statistics. A total of 10 people have received the loan in this group and this impacted an average of 56 dependants in their households. 

Mrs C. James (name is fictional) lost her husband over 10 years agao and since then has struggled to provide a stable upkeep for her five children. She has received support from CashAccess and put her children who were formerly out of school back into the school system and paid up fees fully. The implication of this is that with the loans support to carry out her business ideas during the church event, like many of our beneficiaries, Mrs James doesn’t need to utilize her children’s services to sell the goods in the neighbourhood anymore. For most poor families in Nigeria, this is a significant accomplishment since the small contribution of a child’s income or assistance at home can make the difference between hunger and survival. So children are given away to work as servants, hawkers, bus conductors, to name a few, to earn additional income to assist the home and pay their school fees. Mrs James says, “the loan don do so many thing for me ooooo, E make me train my children and help me move go front my business dey even grow well well…” 

A similar success story can be observed from the GreenPeace Ladies in Business, a group of … women who are beneficiaries of InnovationMatters’ programmes. Located in Sango area of Ogun State, these women live on the borderline poverty. Through teambuilding … they have … utilized their group support to impact on collectively 43 dependants. “if you collect money for a business that gains we surely see the results in your pot in the kitchen and your children!.”

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