Association urges collaboration with NICON to deepen micro-insurance

Insurance contributes less than 1% to Nigeria’s GDP - Business Lawyer
United Bank for Africa

The Association of Non-Bank Micro Finance Institutions of Nigeria (ANMFIN) wants to collaborate with the National Insurance Company (NICON) Plc to deepen micro-insurance penetration in the country.

The ANMFIN President, Mr Hamid Afolabi, expressed the desire on Monday when he led a delegation to the office of the NICON Managing Director, Mr Samuel Bayode, in Abuja.

Afolabi pledged the association’s commitment to ensure an increased micro-insurance participation in the country.

He said that ANMFIN had decided to key into the Federal Government’s financial inclusion drive to ensure that more Nigerians were financially included in the insurance industry.

According to him, there has been a recent drive for micro-insurance in the country, being championed by the regulatory body, NAICOM.

The ANMFIN president said the drive followed a realisation that only one per cent of the Nigeria populace was insured.

“The rural populace is not insured and, as you know, it is susceptible to different forms of risk.

“Government’s financial inclusion drive to make more people financially included also includes insurance.

“ANMFIN has keyed into that financial inclusion drive, but we realise that most loans disbursed by our members are to people at the rural areas or grassroots who have no insurance.

“We saw the need to provide insurance for every loan that we disburse; that is why we are here to partner with NICON.’’

He explained that with its partnership with NICON, if someone took a loan and was unable to pay, then the insurance company would pay the loan on his behalf.

“That means that the person will be restored and he will not lose completely, so the whole idea is to drive this micro-insurance to the rural people.

“What we are looking at is for the insurance company to insure any loan below one million naira, but if it is above N1million, then we will approach the conventional insurance for coverage,’’ Afolabi said.

Afolabi said that it had offers for collaboration from lots of insurance companies, but after detailed interactions that, NICON had better prospects than the other contestants.

He said that most of government interventions to Micro, Small and Medium Enterprises (MSMEs) in the country ended up as bad loans because the business owners were not insured.

The ANMFIN president said that its members, which cut across all nooks and crannies of Nigeria, decided after due consideration that they needed to secure their participation in government intervention.

“That is the reason we searched for and chose NICON to help us drive this and with the portfolio you (NICON) have given, we believe our partnership will yield positive results,’’ he added.

Bayode pledged NICON’s commitment to provid ANMFIN members the necessary insurance cover they needed to help drive micro insurance in the country.

Bayode, represented by the Executive Director, Technical, Mr Akinsola Ale, said one of the ways in which NICON would do this was by providing key man insurance for ANMFIN members.

Key man insurance secures the loan of an entrepreneur in case of death.

The certificate of the insurance is submitted to the organisation providing the loan as collateral or security if anything happens to the loan collector.

Bayode explained that the partnership would be beneficial to ANMFIN as the members would leverage on NICON’s wide spread.

“NICON insurance has a national spread in all the 36 states of the Federation, including FCT, meaning that within any area, your members can actually access our services.

“We also have a medium term policy that is being worked on right now whereby we would even spread beyond the states.

“What we will eventually do is to have some offices at the rural level where we can be easily accessed by some of these MSMEs.

“No insurance company has our capacity in terms of spread, asset base and even experience of personnel which are the things I think you looked at in choosing NICON to partner with ,’’ Bayode said.

He said, “Signing this agreement with you is a thing of pride and we want to assure you, we will keep in mind all the obligations that have been bestowed on us, and we will not disappoint you.

“We are also very optimistic that you will also fulfill your own end of the bargain,’’ the NICON chief said.