Insurance and pension operators have been urged to provide necessary and attractive incentives that will attract informal sector workers to embrace micro insurance and micro pension plans.
The Director-General/Chief Executive Officer, Lagos Chamber of Commerce and Industry (LCCI), Dr. Chinyere Almona, 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 National Association of Insurance and Pension Editors (NAIPE).
Dr. Almona said that although the insurance and pension sectors had been doing a lot in driving the financial inclusion initiative of the Federal Government, there was a need to incentivise and encourage the Nigerian Nano, Micro, Small and Medium and Enterprises (NMSMEs) operators to embrace micro insurance and join the micro pension plan.
Calling on insurance underwriters and pension administrators to take advantage of opportunities that abound in the NMSME sector, she 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 employments 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, include a safety net at retirement, alignment with the current social empowerment programmes, minimises old-age poverty, improves standard of living for the elderly
She called on the National Pension Commission (PenCom) and National Insurance Commission (NAICOM) to provide necessary regulatory framework that supports NMSMEs.
She said: “With regulatory support, Nigeria is well placed to achieve meaningful micro-pension coverage rapidly as well as enhance insurance penetration.
“The percentage ratio of pension assets to GDP remains low. 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
“The ratio of insurance assets to gross domestic product (GDP) has remained stagnant at 1 per cent. Microinsurance in Nigeria is at a very early but growing phase”, she added.
Earlier in her keynote address, the Director-General, National Pension Commission (PenCom), Mrs. Aisha Dahir-Umar, who was represented on the occasion by the Head, South West Office of PenCom, Dr. Tunde Alayande, said 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 disclosed 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.
Earlier in her welcome address, the Chairman of NAIPE, Mrs. Nkechi Naeche Esezobor, said the conference theme: “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.