Jacob Ajakaiye, in Kano
The management of Mafita has initiated a multi-million naira funding window tagged “crowdfunding”, as a way of sustaining the youth empowerment programmes it is implementing in northern Nigeria.
Under the crowdfunding scheme, the beneficiaries of the Mafita programme, which is currently being funded by the United Kingdom’s Department for International Development (DFID) to assist marginalized youths in the states where the project is being implemented, gain skills, as well as employment.
The Mafita crowdfunding, which is designed to be an innovative social lending scheme, is to be financed by both Sterling Bank Plc, and the Bank of Agriculture (BOA), and implemented by a Kano based Grassroots MFB Microfinance Bank.
Providing facts about the scheme, Tajudeen Dantata, chairman, board of trustees of Mafita, disclosed that the crowdfunding was patterned to provide, direct funds, and operational tools to the beneficiaries of the various trainings.
According to Dantata, since inception, the crowdfunding scheme has attracted approximately N17 million which has been successfully disbursed in form of tools and equipment to over 100 beneficiaries of Mafita trainings.
Dantata who spoke on the sidelines of the inauguration of the trustees, revealed that funding window initiated by the management of the not-for-profit organisation, will make Mafita to generate its funding locally, in order to reduce its dependence on DFID, which is on the verge of scaling-down its funding in a few years.
“The Mafita crowdfunding initiative was developed to initially target particular categories of beneficiaries that face additional obstacles in setting up their businesses or accessing loans. The selected categories of beneficiaries are Person with Disabilities (PwDs), women working in male-dominated trades (such as carpenters and mechanics and female divorcees. In time the initiative will be rolled out to include other categories of marginalized youths as well.
“Under the Crowdfunding Scheme, people and organisations donate money which goes into a pooled fund. Disbursements are then made to marginalized youth who have been screened and pre-selected by Mafita. These loans are not cash loans but asset based loans where the tools and equipment required by the beneficiaries are purchased directly on their behalf. This limits the risk of cash diversion.
“The scheme is an innovative social lending scheme that adopts the concepts of revolving fund, which is housed at a microfinance bank (MFB) and managed by an independent fund manager. The term ‘revolving fund’ means that when beneficiaries pay back loans, the money goes back into the fund – the pool of funding available to other beneficiaries – thereby creating sustainable access to finance, which will continue long into the future. Repayment takes place over a period of between 12 to 18 months at 0% interest.
“The fund is therefore topped up continuously both through donations from the wider public. Mafita has developed stringent processes and a transparent operational model to ensure the success of the innovative social lending scheme,” Dantata observed.