The National Insurance Commission and the Lagos State Governor, Mr Babajide Sanwo-Olu, have urged micro, small and medium enterprises in the state to embrace insurance in order to protect themselves against losses.
The Commissioner of Insurance and Chief Executive Officer, NAICOM, Mr Sunday Thomas, noted that in Nigeria, all development interventions of the current government had components focused on enabling MSMEs to sprout and flourish “but unfortunately, with little or no insurance content to deal with associated risks and ensure sustainability and guarding them against failure.”
According to him, the concern is that the progress made in the sector can be aborted if there are no support in place.
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“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,” he said at a sensitisation workshop organised by NAICOM on Thursday.
He said, “The range of impact include job losses, debt overhang, and a 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”
“This will support the sector for speedy recovery when unforeseen situations occur. Thus, NAICOM have undertaken to educate and drive enrollment for these products through this sensitisation workshop,” he said.
On his part, Sanwo-Olu advised insurance companies to ensure that the insurance policies provided for MSMEs are designed to meet their needs and address their peculiarities.
The governor, who was represented by the Commissioner for Finance, Dr Rabiu Olowo, said, “Given the global recognition of MSMEs as major contributors to the economy in terms of work creation, employment generation, we cannot afford to ignore the challenges confronting MSMEs, especially those that threaten their survival.
“That is why Lagos State, which is the hub of MSMEs in Nigeria, has launched so many initiatives and strategies, which are still being implemented towards providing the enabling environment for MSMEs, not only to thrive but to succeed.
“It is however imperative for us to acknowledge the fact that as laudable as these initiatives, including those implemented on other levels of government, the Central Bank of Nigeria, sustainability of the anticipated aid cannot be achieved without the safety nets against unforeseen circumstances.”
The Chairman, House of Representatives Committee on Insurance and Actuarial Matters, Mr Darlington Nwokocha, said, “Today, from the flank of the legislature, we are trying our best to see that there is a very deep penetration of insurance in Nigeria.
“By the time the Insurance Act Amendment is achieved, the penetration and implementation would be worthwhile. We hope we have retail insurance that at every point, the compulsory insurance would benefit both the users, drivers and implementers. I want to say that we would do all our best to ensure that the insurance industry would be something that would be so beneficial to all Nigerians.”