NAICOM boss laments absence of insurance to safeguard MSMEs

COMMISSIONER FOR INSURANCE/CEO, NATIONAL INSURANCE COMMISSION (NAICOM) Mr. Sunday Thomas has expressed dismay at the near absence of insurance cover that would safeguard and word off failure of Micro Small and Medium Enterprises (MSMEs).

Speaking at the sensitization workshop on Insurance for MSMEs and Stakeholders in Lagos Thursday, Thomas explained that, “In Nigeria, all development interventions of the current administration have had components focused on enabling these 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.”

“According to the National Bureau of Statistics, Micro, Small and Medium Enterprises (MSMEs) in Nigeria have contributed about 48% – on average – to the national Gross Domestic 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.

“While some challenges still abound from infrastructure to funding, it is encouraging that the Federal Government through its deliberate policy of removing 100million Nigerians from poverty in the next ten years is taking on the challenges to build businesses and leverage them to create prosperity. “

He further said however, the concern is that whatever gain or progress made in this sector can be halted abruptly in the face of a natural or man-made disaster which can often prove daunting to surmount without any support. 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.

“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. It gives you confidence to venture

Insurance is that product you buy when you think you do not need it because it may be too late to buy it when the need for it arises,” he added.