CBN, MFB’s seek to deepen financial inclusion using microinsurance

The Central Bank of Nigeria (CBN) and financial sector experts have called for collaborative efforts among microfinance banks (MFBs) to promote the expansion of microinsurance as a tool for deepening financial inclusion.

Making this call in Lagos at the 6th Annual Symposium of the Nigerian Microfinance Platform (NMP) organised by the Microfinance Learning and Development Center (MLDC), with the theme, Expanding The Frontiers of Financial Inclusion: The Microinsurance Option”, the experts averred that microfinance banks are instrumental to the expansion of microinsurance services among the populace.

Addressing participants at the symposium, Aisha Ahmad, deputy governor, Financial Sector Surveillance at the CBN, said there is need for a collective strategy to re-emphasize the importance of micro-insurance as a financial service and re-align it as a vital tool in attaining a higher level of financial inclusion within the Nigerian Microfinance Sub-sector through the security of micro- businesses.

Represented by Idowu Akinlade, deputy director, Other Financial Institution Department, OFISD, CBN, Ahmad said: “Financial inclusion, which entails affordable and available access to financial services by every adult in any given country or area, also includes insurance; however, this aspect of financial servicing has been under-emphasized for too long.

“I consider it vital for us, through collaborative efforts, to look deeper into this shadowed aspect of financial inclusion, exchange ideas with our counterparts from other countries, build regulator/operator capacity and tackle issues within the sector to enhance the provision and availability of affordable financial services in Nigeria.”

Also making a case for collaboration among MFBs on microinsurance, Andrew Fening Okai, group chief executive officer, Letshego Holdings, the parent company of Letshego MFB, said: “Microfinance participants should commit to collaborate on building microinsurance as product of necessity and do it with confidence – adopt and develop clear value propositions while paying attention to simple but efficient distribution channels supported by easy claims resolutions.”

On his part, Hassan Bello, managing director/CE, Nigeria Deposit Insurance Corporation (NDIC), advised the participants on factors MFBs need to consider in the provision of microinsurance services.

Represented by Joshua Etopidiok, Director, Special Insured Department SIID, NDIC, Hassan said these factors include: Trust quotient of the insurance industry; ease of purchase of microinsurance services; customer service through digitisation; and advocacy for microinsurance.

Speaking on the urgency for MFBs and micro businesses to embrace microinsurance, Bayo Olugnemi, president, Chartered Institute of Bankers of Nigeria (CIBN) said: “The onslaught of the COVID-19 pandemic and the social unrest which climaxed the EndSars protest corroborate the need for insurance no matter the size of a given business. You will recall that during the protests, social tensions escalated to heightened levels of violence, looting and vandalism. No doubt, uninsured businesses felt the full effects of the destruction with no or limited options for recovery. I strongly believe that this experience provides a very strong use case for the adoption of microinsurance.”

Corroborating this position, Adetutu Ogunnaike, board chairperson, AFOS Nigeria LTE, , AFOS, said the need for inclusive microinsurance cannot be overemphasized, especially in view of the achievement of AFOS through the empowerment of low-income people.

AFOS, she added, is committed to making insurance inclusive and hence look forward to suggestions on how financial protection from risks can be provided for low-income households.