Insurance and pension operators have been urged to provide necessary and attractive incentives that will encourage and attract those in the informal sector to embrace the micro insurance and micro pension plans.
Dr. Chinyere Almona, Director General/Chief Executive Officer, Lagos Chamber of Commerce and Industry (LCCI), made the call in Lagos while delivering the theme paper: “Onboarding MSMEs into Micro Insurance and Pension Space in Nigeria,” at the 7th Annual Conference of the Nigerian Association of Insurance and Pension Editors (NAIPE).
“Although the Insurance and pension sectors have been doing a lot in driving the financial inclusion initiative of the Federal Government, there is need to incentivize and encourage those in the informal sector, the Nigerian Nano, Micro, Small and Medium and Enterprises NMSMEs operators to embrace micro insurance and join the micro pension plan,” Dr Almona said.
While calling on Insurance underwriters and pension administrators to take advantage of numerous opportunities that abound in the NMSME sector, Dr Almona said “NMSMEs presents huge opportunity for the micro insurance and pension industry due to the size of the workforce.”
Other opportunities include 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.
Statistically, the LCCI DG said the total number of employment by MSMEs stood at 61.9 million representing 87.9% of the total labor force in the country, adding 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, include a safety net at retirement, alignment with the current social empowerment programmes, minimizes old-age poverty, improves standard of living for the elderly
She called on the National Insurance Commission (NAICOM) and the National Pension Commission (PenCom) to provide necessary regulatory framework that supports NMSMEs, said stated “With regulatory support, Nigeria is well placed to achieve meaningful micro-pension coverage rapidly as well as enhance insurance penetration.
Speaking on the micro insurance Industry, Dr Almona said the ratio of insurance assets to gross domestic product (GDP) has remained stagnant at 1%, noting that Microinsurance in Nigeria is at a very early but growing phase.
On the Nigerian Micro Pension Industry, she said the percentage ratio of pension assets to GDP remains low, stating that the total pension contribution remitted by the public sector is slightly higher than that of the private sector which, according to her, further justifies the low penetration of pension in the private sector of the economy.
Earlier in her Keynote address, the Director-General, National Pension Commission (PenCom), Mrs Aisha Dahir-Umar who was represented at the occasion by the Head, South West Office of PenCom, Dr Tunde Alayande that the on-boarding 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
Dr Alayande said that PenCom In collaboration with the Pension Operators Association of Nigeria (PenOp), has come up with lots of initiatives for the SMEs for the benefit of the industry.
In his goodwill message on behalf of all members of the Nigerian Insurers Association (NIA), the Chairman , Sugun Omosehin commended NAIPE for the conference., noting that the conference the conference is not only significant to the insurance Insurance Industry but also to the entire financial services industry.
According to him, the reason personally I am here today is that significant. NAIPE is not only projecting the image of the industry but in such a manner of making people get to understand what we do, what we represent and how he can impact our economy.
Earlier in her welcome address, the Chairman of NAIPE, Mrs Nkechi Naeche Esezobor 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 to continue to contribute to the growth of the economy.
She urged micro insurance and micro pension operators to see SMEs as their growth assets by ensuring that they are properly captured .
Highlight of the event was the unveiling of the association’s new identity.