• Friday, March 29, 2024
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Informal sector workers want to be involved in designing micro insurance, pension products

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Informal sector players including Traders and Artisans have asked operators in insurance and pension industry to work closely with them in designing their products so that providers can actually understand what their needs are.

They said that working with insurers and micro pension operators will enable providers come up with the kind of products that meet the need of consumers and encourage patronage.

“We want to key into the products of insurers and pensions, but we would be more at peace if the products consider helping our businesses in the area of funding and training so that we can be empowered in knowledge as well as capital to support our businesses, says Eric Ndubueze, one of the informal sector participant at the NAIPCO National Conference held in Lagos.

Ndubueze said a lot of the small business operators; particularly traders have interest in planning their retirement but do not know how to go about it.

“We will be better off if we can be educated by practitioners in the industries as we know truly that, this is the way to go to overcome old age poverty, he said.

Executives of the Federation of Informal Workers Organisation of Nigeria (FIWON) who were also present at the Seminar said coming up with any product policy that affects informal sector operators without carrying along the key beneficiaries would amount to waste of resources and time.

He said that, they need to work closely with regulators and operators in the pension industry, as well as micro insurance products to enable them understand their peculiarities.

According to them, micro pension would not achieve its expected target without considering the flexibility of the informal sector environment.

They therefore called on the regulator to sit down with them for effective designing of the products and its eventual implementation.

For the National Pension Commission (PenCom), success of the Contributory Pension Scheme (CPS) which commenced 15-years ago have gone beyond value of pension assets, but more on the number of Nigerians protected under the scheme.

This singular vision is what is driving the Commission’s quest for increased penetration of the scheme across the states and local governments as well as its micro pension scheme which targets to open up the informal sector market.

For the National Insurance Commission (NAICOM) as well, micro insurance was key in its agenda to deepen insurance penetration in Nigeria from 0.3 percent currently to something comparable to its position in Africa.

NAICOM had early last year given June 30, 2018 deadline to non-life insurance companies to unbundle microinsurance products for standalone license. At the moment, two stand alone applications have been approved, while quite a number are in the process of getting regulatory approval.

Low-income households, micro, small and medium enterprises are particularly vulnerable to risks, be they related to health, agriculture, property or death. These risks often carry heavy financial implications as individuals, businesses and households attempt to deal with them. Since very few of these groups have access to efficient and effective formal risk management and social protection mechanisms, recuperating losses and recovering from shock is at best difficult, and more often impossible.

According to the microinsurance network, Microinsurance provides poor and low-income households with the means to protect themselves against the effects of risk. The role of microinsurance must therefore be viewed alongside government provision of basic health services, employment and education, etc., all of which go towards alleviating poverty.

 

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