Risk Disclosure
Please read and fully understand the risks associated with peer-to-peer microlending investments.
1. General Investment Risk
All investments carry varying degrees of risk. Backing and funding small and medium-scale enterprises (SMEs) involves a high degree of business and economic risk. Capital matched on Jika Side is not a bank deposit and is not insured by the NDIC (Nigeria Deposit Insurance Corporation) or any government agency.
2. Default Risk
While we perform a detailed 40-point assessment on borrowing businesses, there is a risk that borrower businesses may default on interest payments or principal repayments due to industry failures, management challenges, or economic downturns. Pledges, guarantor cheques, and collateral assets are used to mitigate default risk, but recovery cycles can take time.
3. Liquidity Risk
Placing funds in SME matching plans locks your capital for the period of the investment cycle (typically 3, 6, or 12 months). There is no secondary market to sell or trade your matched packages. You should only invest capital that you do not require immediate access to during the tenure period.
4. Inflation and Economic Factors
Changes in general economic conditions, interest rates, government fiscal policy, inflation, and foreign exchange rates in Nigeria may affect the creditworthiness of borrowing SMEs, thereby impacting overall default rates and investment returns.
5. Vetting Limitations
Jika Side Microcredit uses historical financial records, operation audits, and qualitative references to vet borrow applicants. Past performance is not a guarantee of future outcomes. Vetting assessments are based on information provided by applicants, and while verified to the highest extent, carry a risk of misrepresentation.