No doubt, players in the Micro, Small and Medium and Enterprises(MSMEs) sector of the nation’s economy are most affected when natural disaster or risk occurs. Yet, they, in most cases, have no form of risk mitigation mechanism to protect their lives, businesses and their future. Hence, when disaster struck, most of them have no form of financial muscle to restart again, thereby, dragging themselves back into poverty net.
To this end, experts have suggested that on-boarding MSMEs into Micro Insurance and Pension Space in Nigeria, remains the best option to protect their lives, businesses and future.
Experts, who spoke at the event, also advocated the fusion of attractive incentives in the deployment of micro pension and micro insurance plans to Small and Medium Enterprises(SMEs) in the country.
Organised Private Sector(OPS)
Speaking on behalf of the Organised Private Sector(OPS),, the director general/CEO, Lagos Chamber of Commerce and Industry (LCCI), Dr. Chinyere Almona, said, although, the insurance and pension sectors were doing a lot in driving financial inclusion initiative of the federal government, there is need to incentivise and encourage those in the informal sector, especially, the Nigerian Nano, Micro, Small and Medium and Enterprises(NMSMEs) operators to embrace micro insurance and join the micro pension plan.
While calling on underwriters and pension administrators to take advantage of numerous opportunities that abound in the NMSME sector, Dr Almona said, this critical market presents huge opportunity for the micro insurance and pension sectors due to the size of the workforce.
Other opportunities she listed included: large MSMEs employment/labour force, large willing adult population, expanding distribution channels, favourable regulatory environment, mature financial services sector and revolution in information technology and digital innovations.
Saying the total number of employment by MSMEs stood at 61.9 million representing 87.9 per cent of the total labour force in the country, she added that, the number of employment generated by the informal sector was 16 million while the formal sector generated 7.5 million in 2020.
On the need to step up awareness and enlightenment of the NMSMEs on the benefits of micro insurance and micro pension and application of technology, Dr Almona said, ‘investment in enlightenment campaigns and enabling technology are required.’
The benefits, according to her, included; a safety net at retirement, alignment with the current social empowerment programmes, minimizes old-age poverty and improves standard of living for the elderly
While calling on the National Insurance Commission NAICOM) and the National Pension Commission (PenCom) to provide necessary regulatory framework that supports NMSMEs, she stated that, “with regulatory support, Nigeria is well placed to achieve meaningful micro-pension coverage rapidly as well as enhance insurance penetration.”
Pension Stakeholders
Earlier in her keynote address, the director-general, PenCom, Mrs Aisha Dahir-Umar, who was represented at the occasion by the head, South West Office of PenCom, Dr Tunde Alayande, stated that, the on-boarding of SMEs into the micro pension scheme is one of the strategies in which the pension industry has been contributing to the financial inclusion initiative of the federal government.
He said the micro pension plan was designed for those in the informal sector, including the SMEs, disclosing that PenCom, in collaboration with the Pension Operators Association of Nigeria (PenOp), has come up with lots of initiatives to benefit SMEs through the scheme.
On his part, chief executive officer(CEO), Pension Fund Operators Association of Nigeria, (PenOp), Mr. Oguche Agudah lamented the low adoption of the plan while describing it as a national emergency scheme which will be used to save the future of the country.
According to him, operators must begin to look at how to make the scheme suitable, available and how to incentivise them.
In her remarks , the chairperson , Nigerian Association of Insurance & Pension Editors, (NAIPE), Mrs. Nkechi Naeche -Esezobor said, SMEs sector has been the major driver and engine of growth of the Nigerian economy, and being the sector with the highest employers of labour, needs all the support to enable it continue to contribute significantly to the economy.
Insurance Stakeholders
In his goodwill message, the chairman, NIA, Mr. Segun Omosehin commended NAIPE for the conference, noting that, the conference is not only significant to the insurance industry but also to the entire financial services industry.
Speaking on the theme of the conference, the managing director, Heirs Life Insurance Limited, Mr. Niyi Onifade, noted that, MSMEs and SMEs have several risks that insurance operators must look into to provide a cover in order to limit old age risk.
According to him, insurers must begin to understand that SMEs are not just the artisans, vulcanisers on the road, but has expanded to the technology guys, photographs including the well educated who control different kinds of businesses.
He urged operators to improve on the awareness level to further deepen adoption of the plan.
On her part, chief executive officer(CEO), Enterprise Life Assurance , Mrs Funmi Omo said, “For us as insurance practitioners, there are a lot we should do. We have to start by engaging people at the level of which they are.
“Since we have a lot of educated and non educated people in the informal sector then we have to be diverse in our engagement.”
According to her, this can be achieved through adoption of technology adding that, ‘using digital means is crucial because it ensures efficiency.’
Earlier, Mrs Nkechi Naeche Esezobor had said, the theme of the conference; ‘Onboarding MSMEs into Micro Insurance and Pension Space in Nigeria,’ was considered because of the importance of SMEs as driver and engine of growth of the Nigerian economy and the need to support it for the growth of the economy.
Conclusion
Experts who spoke at the 7th edition of NAIPCO conference in Lagos, said that operators must recognize the segmentation of the informal sector and begin to offer products to suit their needs . This they said must be done in order to improve the adoption level of the plan.
This is even as the experts fear that this will further trigger old age poverty as huge percentage of SMEs are yet to onboard into the plan.
In a communique issued at the end of the conference, participants agreed that the media should assist to push the messages to the general public and educate the NMSMEs on how to benefit from both micro insurance and micro pension.
Speaking on the issue of inclusiveness of the disabled, the conferees agreed that the disabled must be deliberately included.
The confab called on insurance operators to have appropriate products and services that meet the peculiarities of the MSMEs because their needs and requirements are different.
Participants noted that, there is a lot of encouragement by the regulators and a lot is being done around inclusion. “But what happens between now when the MSMEs business is still in operation and when the owner retires? In between this time is where insurance comes in. For insurance practitioners, there is a lot to be done in that space. Thus, insurance partitioners should engage MSMEs in that space leveraging the medium and language that appeals to them to hedge the risks within that space. This is where micro-insurance can play a critical role,” they pointed out.
