Monieworx raise N100 million for three SMEs within 10 days

Nigeria’s SEC-regulated Crowdfunding Intermediary, Alternative Finance Limited (Obelix), through its funding platform, monieworx, has said it raised N100 million from 9,324 registered small-ticket retail investors for three small and medium enterprises.

The funds was raised within  10 days, thus successfully pioneering an alternative way of raising badly-needed cash for SMEs operating in Nigeria.

The investors were wholly from its waitlist of 42,545 early adopters. The average investment in the private notes was N10,725 with the smallest and biggest tickets being N1,200 and N20,000 respectively. The longest duration of the new asset class for individual investors is 90 days, with a fixed rate of 12 per cent per annum.
Formal SMEs in Nigeria, contribute 84 per cent of total employment, 45 per cent of GDP but just 8 per cent of exports and tax collections by the Federal Inland Revenue Service (FIRS) according to a recent joint report by the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) and the National Bureau of Statistics (NBS).

A total of 15 eligible applications to raise funds were considered by the company’s Screening Committee but only three of the SMEs were accepted by Obelix to embark on their crowdfunding campaigns through monieworx®.

The firm noted that all the fundraisers have a good corporate governance record and are SMEDAN-registered. The 3 most promising small and medium enterprises that have their securities offerings hosted are; Imose Technologies Limited, Alatiron Nigeria Limited and Q21 Solutions Limited.

According to a formal MSME finance gap in developing countries report by the World Bank, the unmet financing needs of Nigeria’s formal SMEs is estimated at US$22 billion yearly. For context, total banking loans was US$66 billion as of December 31, 2022, giving SME loans an 8 per cent share of the loan book. The risk in this sub-sector is priced in the range of 28 per cent to 35 per cent p.a. Gaining access to finance is by far the biggest constraint to SME growth.

Over 70 per cent  of the 40 million SMEs cited a lack of finance and access to financing as the main constraint to their business growth. Access to advisory services and access to markets weighed in at a distant second and third. According to the Credit Bureau Association of Nigeria (CBAN), only four percent of the 40 million SMEs have access to credit from Nigerian banks. 80% of new SMEs in Nigeria thus die before their fifth year.

Director and Co-founder of Obelix,  Lanre Showunmi, said, “monieworx® has broadened participation in a very significant way. Debt is the safety part in a portfolio, and we are on course to become the dominant portal through which small-ticket investors enter the debt capital market in keeping with our commitment to make investing fair, accessible, and inclusive.”

Managing Director, Obelix, Ali Yakubu-Concern, said, “SME financing is at an inflection point. We have been presented with a once-in-a-lifetime opportunity to win customer primacy and we intend to seize it with both hands. Owning alternative investments will become increasingly valuable”.

Director at Alatiron Nigeria, Abubakar Maibe, explained that there is 100 per cent custody of funds and investment contracts through an arrangement with First Bank, that is registered with Nigeria’s SEC to be a custodian bank.

According to Chief Operating Officer, Imose Technologies Limited, Osaretin Sule, debt crowdfunding presents a unique opportunity to access growth capital during this acute funding crunch leveraging alternate financing options that are non-dilutive and founder-friendly by design, on the one part and provides an incentive for the communities in which we operate to get involved through co-creation of value, on the other part. This way, the local economies become more resilient”.

Creative Director at Q21 Solutions, Eunice Adeyemi, said Obelix was a first choice over traditional banks because monieworx® hosted our debt-based securities with more favorable terms, lower interest rates, quicker approval times, and a simpler application process”.