Home Finance NAICOM, foreign firm begin diagnostic study of micro-insurance in Nigeria

NAICOM, foreign firm begin diagnostic study of micro-insurance in Nigeria

by Business News Report

The National Insurance Commission (NAICOM) has commenced a diagnostic study of micro-insurance in Nigeria with a view to providing improved services to millions of uninsured people in rural areas. The study is being conducted in partnership with a German firm, Gitz and a Non-Governmental Organisation (NGO), Access to Insurance Initiative.
Speaking at the inaugural meeting of the study in Abuja, Commissioner for Insurance, Mr Fola Daniel, said the product was designed with the objective of protecting poor people and their business environment. He said the study, the first of its kind in the sub-sector, was also developed to cater for people ignored by traditional insurance services. Daniel said majority of the estimated 160 million Nigerians, who lived on less than one dollar a day, could hardly afford banking services while many remained “largely under-banked and uninsured.’’
“We are all affected by one form of risk or the other whether you are a rural, town or city dweller. The rural dwellers are more vulnerable because the level of absorption is low, for instance what represents a financial calamity to a rural dweller will just be one of those things to a town dweller. If a rural dweller who is a fisherman loses a canoe that is ruined situation where as a town dweller loses one of three of his vehicles, he will still be able to carry on.
“We are focusing on the rural areas, identifying the risks that they have and managing it in a sustainable manner.’’ Mr Christian Widmann, Head of Programme, Gitz, identified lack of proper financial services and trust as a major impediment tothe development of the micro-finance sub-sector in Nigeria. Widmann said the study was part of the firm’s activity on public and financial sector development in the country.
“We try to address the needs of Micro, Small and Medium enterprises and we believe that one bottleneck for them is lack of proper financial services. Besides from microfinance we believe that micro insurances are products which companies need to grow and develop. We think that so far the insurance sector in general Nigeria has not really taken off because of lack of trust of the people. So we are trying to find out what is the supply, what is the demand of those kind of insurance products and how can the regulation be improved so that more people will develop trust in the financial sector products like insurance products.’’

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