The National Insurance Commission (NAICOM) has sensitised more than 300 Nano, Micro, Small and Medium Enterprises (NMSME’s) on the benefits of microinsurance products designed to meet their needs.
The Commissioner for Insurance, Mr Sunday Thomas, said this at a one-day sensitisation workshop organised by the National Insurance Commission (NAICOM) for NMSME’s in Lagos.
He stated that MicroInsurance and Takaful were two insurance offerings carefully designed for affordability and inclusiveness to bring insurance within the reach of the NMSME’s which are one of the nations most valued contributors to the economy.
Thomas said the products would support the NMSME’s sector for speedy recovery when unforeseen situations occur.
He noted that the workshop was designed to provide insights for the regulator to learn from, adequately protect the NMSMEs as policyholders as well as ensure a safe and sound insurance sector.
The commissioner said that the engagement would also encourage innovation and product development that meet the specific needs of the MSMEs.
”According to the National Bureau of Statistics (2019), NMSMEs in Nigeria have contributed about 48 per cent on average to the national Gross Domestic Product (GDP) in the last five years from a total of about 17.4 million enterprises.
“They account for about 50 per cent of industrial jobs and nearly 90 per cent of activities in the manufacturing sector.
“In Nigeria, all development interventions of the current administration have had components focused on enabling these MSMEs sprout and flourish.
”But unfortunately with little or no insurance content to deal with associated risks and ensure sustainability and guarding them against failure,” he said.
Thomas noted that whatever gain or progress made in the NMSME’s sector could be halted abruptly in the face of a natural or man-made disaster which could often prove daunting to surmount without any support.
He stated that when MSMEs are affected by any mishap, the disruption produces not only direct business losses, but also indirect losses and economic ripple effects.
“The range of impact include job losses, debt overhang, and relapse of households into extreme poverty.
“While the risks that expose MSMEs to this type of vulnerability may not be within the scope of human control, what is within human reach is a deliberate risk management plan through Insurance.
“Insurance gives you the confidence to venture, it is that product you buy when you think you do not need it because it may be too late to buy it when the need for it arises,” he added.
The commissioner expressed concern that the importance of insurance to lives and property, adoption and penetration had been low in Nigeria.
Thomas said that the workshop had so far been held in Kano, Kaduna and Abuja, pulling NMSMEs from these cities and their environs and the average attendance per location have been over 1000 MSMEs.
”However, due to the prevailing pandemic and the need to adhere to the protocols, the number allowed in the hall today is restricted to 300 MSMEs.
”Lagos state is a key stop for us for obvious reasons; first, Lagos has been Nigeria’s nerve centre of commerce, the state hosts the single largest number of NMSMEs in the country at 11.5% of the total.
”Secondly, and more importantly, the current and past administrations of this state have demonstrated a continuous commitment to sustaining MSME growth,” he said.
The Chairman, Nigeria Insurers Association (NIA), Mr Ganiyu Musa. lauded NAICOM for organising the workshop as it would assist the insurers to adequately meet the needs of the small business owners.
Musa represented by Mrs Yetunde Ilori, Director -General of NIA, advised the NMSME’s to get insurance policies to enable them to do their businesses with peace of mind.
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