BY NKECHI NAECHE-ESEZOBOR–The Lagos State Governor, Mr. Babajide Sanwo-Olu on Thursday tasked the insurance industry on the need to float products for MSMES.
Speaking at the sensitization workshop for Micro, Small and Medium Enterprises(MSMEs) on insurance protection for their businesses organized by National Insurance Commission (NAICOM), Sanwo-Olu noted that products should be designed to meet the needs and also address the peculiarities of MSMES.
The governor who was able represented by the Commissioner for Finance in the State, Dr Rabiu Olowo, was of the view that there should be specially designed insurance products that will meet their categories, income, operations and processes.
” It must be affordable and free of technicality so that it would be easily understood with reasonable assurance of prompt settlement of claims.”
He noted that securing insurance cover for protection against unforeseen situations and losses that may threaten the growing concerns of operations must therefore be encouraged particularly for MSMES giving their vulnerability and likely impact on the prospect of our larger economy.
He urged all MSMES to embrace insurance as a safety net against losses tat they may suffer as a result of unforeseen circumstances.
In a welcome address the Commissioner for Insurance, My Sunday Thomas assured of prompt claims settlement to MSMES.
“The NAICOM is committed to our mandate of providing diligent oversight to the insurance sector towards ensuring prompt settlement of genuine claims when insured event occurs.”
Thomas said their importance to national development cannot be overstated, he classified it as the “fulcrum of a nation’s growth and development.” In addition, “MSMEs form the superstructure to stimulate mass enterprise growth and serve as a livelihood for the base of the pyramid population across all economies be it underdeveloped, emerging or frontier markets.”
He added that there are sustained development interventions focused on enabling 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.”
The MSMEs superstructure is endorsed by the National Bureau of Statistics assigning 48% average contribution to the gross national product GDP in the last five years from a total of about 17.4 million enterprises (NBS 2019.) They account for about 50% of industrial jobs and nearly 90% of activities in the manufacturing sector.
Despite the high score in GDP, Thomas suggests it could be higher but for the infrastructure and funding challenges which is rolling with the government policy to remove 100 million Nigerians from the clutches of poverty in the next ten years. he said the headwind to create prosperity is the spirit of entrepreneurship of Nigerians driving creativity and productivity.
However, as a risk consultant not only to federal government but to Nigerians at large, Thomas said whatever progress entrepreneurs make it could be “halted abruptly in the face of a natural or man-made disaster which can often prove daunting to surmount without any support. He continues, “In particular, 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 a relapse of households into extreme poverty.
He said deliberate risk management could douse the vulnerability of human endeavours and in spite of dark shadows, give “confidence to venture.”
“Notwithstanding the importance of insurance to lives and property, adoption and penetration have been low in Nigeria owing largely to a lot of challenges principal of which may be the inadequate product offerings that meet the needs of the consumers including the MSMEs,” he stated.
He added that the Commission is turning things around by licencing microinsurance and takaful insurance companies for affordability and inclusiveness to bring the excluded contributors to the economy – the MSMEs; and, the sensitisation workshop is another undertaken to drive enrolment for insurance products.
On the success of previous workshop in Kano, Kaduna, and Abuja, he said Lagos state is a key stop for obvious reasons: first, is the nerve centre of commerce, the state hosts the single largest number of MSMEs in the country, put at 11.5% of total. (NBS 2019). Second, and more important, the current and past administrations of this state have demonstrated a continuous commitment to sustaining MSME growth.
He numerated several only-in-Lagos strides which he said, “represent to us both the will and action to engender MSME growth.”
He reiterated the vulnerability of MSMEs becoming extinct by both natural and man-made disasters, as very high: his example was the level of destruction during the #EndSARS protest which may have killed some MSMEs and driven some persons further down the poverty line.
His further promised that “The good thing which is our message to you today is that insurance will provide you the shock-absorber to withstand any of these unforseen calamities when they do occur and help your reinstatement in business.”
