The Nigerian government, through the Trader Moni loan scheme, might have just mismanaged at least N20billion of the funds set aside for the Social Intervention Programme (SIP), SaharaReporters can show.
On January 16, 2019, while speaking at a presidential town hall co-production between Daria Media and the Nigerian Television Authority (NTA), supported by the MacArthur Foundation, Vice-President Yemi Osinbajo confirmed that the present administration had spent something around N20billion on the Trader Moni scheme.
SIP is an empowerment initiative introduced by President Muhammadu Buhari in 2015. The aim, the president said, is to give financial support to indigent Nigerians. The programme, which is subsumed under the office of Vice-President Yemi Osinbajo, is geared towards restoring “livelihood, economic opportunities and sustenance for the poor across the country”. Trader Moni is one of the various government initiatives to achieve this goal, after an investigation by SaharaReporters, it was discovered that the scheme is fraught with different financial irregularities.
Financial mismanagement, in simple terms, refers to unskillful or ineffective way of handling funds.
The Myth of Trader Moni
The Trader Moni collateral-free loan, as positioned by Osinbajo, is a government programme created to provide funds for petty traders and artisans across the country. It is one of the projects under the Government Enterprise and Empowerment Programme (GEEP) scheme and executed by the Bank of Industry (BoI).
At different fora both within and outside Nigeria, Osinbajo explained that the Federal Government would have given out two million of the interest-free loan by the end of 2018. The initial offer of the loan is N10,000 with the opportunity to grow up to N100,000 upon offsetting the old offers. Invariably, the government would have invested a total sum of N20billion on the scheme at start-off.
While speaking in Minnesota, USA, at a town hall meeting with Nigerians in the Diaspora, Osinbajo stated the potential economic impact of Trader Moni for Nigerians at the “bottom of the pyramid”.
“One of the critical things we are doing,” he said, “is looking at how to resource the bottom of the pyramid; how to give credit to the bottom of the pyramid so that they can do their business which is usually informal. So with what is called the Trader Moni scheme or the Market Moni, depending on which one it is; this is a credit scheme being given to almost two million traders. We believe that by giving them money directly, they are able to improve their inventory, do more of their trade and get out of poverty.”
The vice president restated the same position to pressmen in Oyo State during the launch of the Trader Moni programme in the state.
However, this lofty idea is at best a myth as the implementation of Trader Moni loan falls short of the well-branded campaign about the scheme as led by the vice-president. The Nigerian government does not have a water-tight strategy for recouping the funds, if indeed it intends to recover the loans.
An officer at the Corporate Communication department of BoI put the burden of recouping the loans on the agents. Interestingly, these agents have been accused of various fraudulent acts in disbursing the funds.
Speaking with the Civil Media Lab during a fact-finding visit to the bank’s head office in Marina, Lagos, the staffer, who asked not to be quoted, emphasised the importance of a seamless and transparent registration process in monitoring the loans. He explained that the agents create mobile wallets for the beneficiaries with which they are credited and are expected to pay through.
Mobile wallet, as defined by Techopedia, is a type of payment service through which businesses and individuals can receive and send money via mobile devices. It is a form of e-commerce model that is designed to be used with mobile devices due to their convenience and easy access.
He said the traders can walk into any commercial bank with the weekly refund of N437:50 over the course of six months, when they are expected to have completed the payment. They would instantly receive a higher loan of N15,000, the BoI staffer added.
We Are Not Collecting Refunds, Banks Say
However, staffers of the customer service and marketing units of Access Bank, Diamond Bank, Ecobank, First City Monument Bank (FCMB), Fidelity Bank, First Bank, Polaris Bank Limited, and Standard Chartered, all said they had not received instructions on repayment of the Trader Moni refunds.
The branch office of Zenith Bank at Isaac John Street, Ikeja GRA, Lagos, said it does not accept payment for Trader Moni refund, while Polaris Bank on the same street said it had not been advised on which platform to pay through.
A Fidelity Bank staffer also told this reporter that no such payment was set up in the bank, but advised that banks closer to the market should be visited, stating that perhaps they might have plan for such payment.
Also, contrary to BoI’s strategy to use agents for sensitising the traders on how to pay back, Bulus, a coordinator for Kebbi, Sokoto and Zamfara states, dissuaded our correspondent who disguised as a beneficiary seeking to return the loan. “We have not started collecting back the loan. It will be announced in the news when collection starts,” Bulus said over the phone.
These go to show the apparent lack of information on the payment process — if at all there is any — for the agents and traders. A tall, dark man who identified himself as Mr. Bakare told this reporter at the Command Centre in Ojuwoye, one of the markets visited by the vice-president, that he does not know how the government intends to get back the loans. “We don’t know how we will return the money,” he said.
Numerous fraudulent activities that make repayment almost impossible also characterised the scheme. Many of the traders who had benefited from the funds cannot be directly linked to the money. As such, it is easier to avoid repayment. In many instances, agents in these markets get the loan in their personal accounts, then disburse by hand to the traders. The traders, majority of whom are illiterate and do not have bank accounts, rely on agents as middlemen to access the funds. These agents then take a cut, sometimes as high as 50 per cent of the loan, from the traders.
Tales of agents swindling traders pervade all the markets. Some traders accused the agents of charging them between N200 to N1,000 as registration fees, while there are others said the agents took a share, which the traders had to agree to before the facilitation commenced.
“The money was shared equally [between the beneficiaries and their agents],” some traders at Ojuwoye market said. One of the traders, who sells sealed groundnut oil, queried the folly in expecting her to pay back N10,000 when she got N5,000. “How do they expect us to pay back such money?” she asked.
Similarly, other traders who got the loan in Yaba said they were given N8,000, suggesting that N2,000 was deducted. “They gave us N8,000. We were told the money would be N10,000 but it was N8,000 that was eventually given to us,” Elizabeth, who sells plantain along the rail line, said.
Another woman who sells soup condiments along the same rail line said the scheme is marred with extortion. “We thought they were going to help us but they did not. They even collected N1,000 each from us and we registered but we did not get any money.”
While majority of the traders claimed they did not get the loan, some received more than once. Folashade, a middle-aged woman, who sells rubber slippers at Bolade Market, claimed some of her colleagues got more than once.
“Some people got twice and even three times while some did not get at all. Some of us are looking for funds to trade. Please, help us appeal to the government… those of us who really need the fund did not get it.”
Like Leaders, Like Followers
Toyin Adeniji, ED Micro Enterprises of BoI, believes that the promise of higher loan would entice the traders to refund the N10,000. When asked during the programme activation in Onitsha Market, Mrs Adeniji simply said the beneficiary can easily be identified, giving that they were registered in the market where they trade.
“We know them because they are in this market; they are not going anywhere. We have come to register them in their market; we are registering them in front of their table tops, so they are part of this market. Even the people that hawk things around the market are not going anywhere. So, we know that they are tied to this market.”
This, however, might not be as easy as she explained. On one hand, some of the traders, in order to avoid repayment, did not use their phone numbers to register; rather many of them got a new sim card, with which they registered, on the advice of some agents. “I have removed the sim card from my phone,” said a trader at Ojuwoye Market in Mushin, one of the markets visited by duo of Osinbajo and Adeniji.
On another hand, the promise of a higher loan might not elicit the returns as envisaged. Apart from the obvious misinformation that the funds are a windfall, the agents are dissuading willing traders from making refunds, SaharaReporters found out.
The state coordinator for the scheme in Delta and Edo states, simply identified as Paul on the Trader Moni’s website, advised this reporter to hold on to the money as there are no funds available for the second tranche yet. “Madam, hold on to your money first. Nobody will give you any now,” Paul said in pidgin English.
Damola, coordinator for Ekiti State, similarly advised our correspondent not to refund, at least, till the elections are over, if she is interested in refunding the loan.
‘It’s Not a Loan’ As Some Traders Believe
At the popular Yaba market, many of the traders believe the N10,000 handed to them is a windfall, their share of the national largesse.
“They never told us we would pay back; they said it is government money,” a plump lady with a tray full of plantain said when she was told she would have to return the loan.
Another woman, who sells pumpkin leaves, locally known as ‘ugwu’, said they were not informed it was a loan. “We asked them. They said it was Federal Government’s money for all market women. How can N10,000 even be loan? It is not a loan; it’s a gift to women in Nigeria,” she said.
At Oshodi, a plump lady who sells pepper became angry when she learnt she would have to repay the loan. She had believed the money was a gift from the government. “They said they dashed us; we were not told we would repay it. As far as I am concerned, it is a gift. It is part of our resources; I cannot refund it.”
Wasted Effort! ‘We Queued But Got No Money’
Two million traders multiplied by N10,000 ‘loan’, in a country with 180 million people and a robust informal economy, is a drop in the ocean. It is expected that not all the traders would benefit from the scheme. However, if it had been better structured and the categories of traders it targeted spelt out and religiously followed, thousands of people who felt the registration process was a waste of time, would have been better informed and maybe not participate.
At all the markets visited by this reporter, a large number of traders complained about the wasted hours they spent under the sun for registration that left them sun-burnt and with no money. At Mushin, Oshodi, Berger, Bariga, Sabo and Yaba markets, a great number of the traders said it was a wasted effort. “They took our pictures and data but we never got the money. Everyone on this axis did not get the loan,” a roadside beauty vendor in Yaba said as she cleaned the nails of her customer.
In Arena Shopping Complex, one of the markets also visited by the vice-president, a light-skinned lady, who sells ointment by the gate of the complex, agonised about her ordeal in trying to secure the loan. Her ware is a handful of creams, like Wytacan, that stood raised in five rolls on her small-sized tray. She believed the loan would have greatly improved her trade, but she did not get it.
Narrating her experience, she said: “The agent that came to us really made us suffer. He took us to Mushin to collect the money. My colleague and I went with him to Mushin. I don’t know what he said to his colleague, but we were not given any money at the end of the day. I paid for his transportation and wasted time I could have spent selling my goods.
“When the first agent who registered us came back, we told him what happened and he told us that the other agent had taken our money. He said we should not have followed him. Since that day, I swore never to participate in any government scheme. The grace of God is sufficient for me.”
Some of those who benefited from the loan have no use for it as N10,000 is too meager to have any impact on their trade.
“What will N10,000 do for me? It cannot even buy this box of eye pencils,” a woman who sells beauty products at Yaba said. Another woman, Oluwakemi, who sells baskets of pepper and tomatoes, said she bought food items with the money.
“I used it to buy foodstuffs for my house. It is not the kind of money I need for this business. It cannot even buy one big basket of tomatoes or a bag of onions,” she said.0
There are peasant traders across these markets that the loan could have indeed be beneficial to, however, for lack of proper management, they did not get it.
Critics and opposition members of the ruling party have alleged that the government is enticing traders with the loan in return for their votes as the 2019 general election approaches.
Shortly after the vice-president visited some markets in Lagos to launch the scheme, the Peoples Democratic Party (PDP) accused the Buhari-led government of sowing the N10,000 loans for a harvest of votes.
Ayodele Fayose, the immediate past governor of Ekiti State, also indicted the Nigerian government for re-looting the recovered Abacha’s loot under the guise of the Trader Moni scheme.
The Nigerian government denied all the allegations.
At the inspection of the Trader Moni Command Centre in Abuja, Osinbajo dispelled accusations that the Trader Moni Scheme is a ploy by the APC-led government to buy votes ahead of the 2019 general election. He said the funds were approved by the National Assembly, hence could not have been a gimmick to ensure that the Buhari-Osinbajo administration return to power in 2023.
Osinbajo’s rebuttal might be the truth, but the reality for many traders is that the loans are, indeed, an attempt by the government to buy their votes. A husband and a wife trading in iced blocks derided the scheme, tagging it an attempt to buy votes.
“We only heard about the money; we did not get it. I am a card-carrying member of the APC and I only heard about it from people in Arena Shopping Complex. Sometime ago, some government officials came to capture our details and collected N200 from us, but we have not heard from them. N10,000 is not enough to take care of any business except you are trading in pure water. The money is for buying votes; I hope they get to win eventually.”
It’s Grant Not Loan, Experts Say
Financial experts, who spoke with SaharaReporters on the subject, opined that the scheme is better tagged a grant since the government has no intention of recouping the funds.
Jide Ojo, Executive Director of OJA Development Consultant, argued that the lack of accountability and the sustainability process will make it almost impossible to ensure that the traders return the loan at the expiration of the six-month window period.
“I know that some state governors were giving their citizens N5,000,” he explained. “But you know that it is a gift or a grant. You are not expecting them to pay back. It is a monthly emolument or allowance. But this one is done under the guise that the traders are going to pay back; you do not have any guarantor or any collateral and you are getting N10,000 believing that people will be honest enough to want to pay back.”
Similarly, Tope Fasua, an Economist and presidential aspirant, stated that the Federal Government has not put in place mechanism to suggest that it is interested in recovering the loans given to the traders.
“In terms of recouping, there is no process at all; there is no accountability, and certainly there is no way, they are going to recoup that money. The programme is fraught with all sorts of loopholes. It is a monumental waste.
“The government does not even intend to get the money back. They also know that the money would not be got back. It is ‘saara’ and the people actually deserve it, so let’s call it for what it is. The issue then becomes, ‘what is the process by which you started to give the people the money?’ Why did you call it loan? Who gives a loan at zero interest rate? It is a grant from government.”
He added that the appropriation of the funds was illegal, arguing that the government did not expressly state to the National Assembly what the funds would be used for, but instead, pulled it out of funds set aside for the Social Intervention Programme.
The Scheme has Potential to Boost the Economy, Says HEDA Executive Director
Speaking on the matter, Lanre Suraj, the Executive Director of Human and Development Agenda (HEDA), said the Trader Moni scheme is a good idea with the potential to put money into the informal economy, but for the element of corruption that has overshadowed the implementation.
“The Trader Moni, if properly scrutinized and well-implemented, has the capacity to build our small and medium scale entrepreneurs and enterprises in Nigeria,” he said.
“It can also bring about basic foundation towards the source of food sufficiency in food production and other basic necessities of life that are needed for not only the downtrodden, but also some members of the middle-class. The challenge has always been the element of corruption and the insincerity of purpose on the part of officials of government responsible for the implementation and management of initiatives of this nature.
“My hope and wish is that this is not going to suffer similar fate like SURE-P and other initiatives that were designed towards this line of initiatives in support of people who desire and require this kind of support from the government.”
He stressed that a well-planned repayment system is pivotal to the success of the scheme, so that more people can benefit.
“What I thought was going to be the basis of motivation for many of the beneficiaries to refund, is that once the initial disbursement is returned and abided by that beneficiary, they stand the chance of getting a higher amount, which I assume will then be a process that must have been affected by both the NIPSS and also the banks, because it is part of the social intervention programme of the Federal Government. It is therefore very crucial and shouldn’t be rocket science.”
Suraj also discarded the insinuation by critics and the opposition that the loan is an inducement.
“It is not money that is going to ordinary people that should be considered as a sort of motivation for votes. When the money is given to big men in their banks and companies, it is not considered as inducement for votes. It is the one that is going to the ordinary people that is classified as vote buying.
“I think it is complete nonsense and it should not be politicised for any purpose. Should it be stopped such that people should not now benefit from what will assist their lives, uplift their businesses and sources of revenue? I don’t think that is correct.”
N10,000 Not Enough to Boost any Serious Business, Says CISLAC Executive Director
Auwal Musa Rafsanjani, the Executive Director of Civil Society Legislative Advocacy Centre (CISLAC) and the head of Transparency International in Nigeria, has a different viewpoint.
He questioned the timing of the scheme, and why government had to wait till the tail-end of the administration before embarking on the project.
“The Trader Moni scheme of the Federal Government is nothing but vote buying,” the TI head said. “What were they doing for three and a half years? N10,000 cannot really boost the business of any serious person.
“I think this policy is created towards the reelection of the current party. Therefore, it is not meant for really helping traders. It is not about helping the traders; it is a calculated attempt at vote buying because if is it not about buying the traders, why didn’t they do this three years ago?”
He advised the Nigerian government, if they were interested in boosting the economy, to develop policies that would allow Nigerians engage in profitable commercial businesses, stating that cutting down taxes on small and medium scale businesses is one way to encourage active commercial investment among Nigerians.
He maintained that the government cannot be said to be interested in enhancing the economy, while it overlooks big corporations avoiding taxes that could be good revenue for the government to build infrastructure.
“There is a contradiction, really,” he said.