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Experts advocate collaboration among MFBs on microinsurance to drive financial inclusion

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Experts in the financial sector have called for collaborative efforts among microfinance banks (MFBs) to promote the expansion of microinsurance to deepen financial inclusion.

The experts maintained that microfinance banks are instrumental to the expansion of microinsurance services among the populace.

According to a statement made available to Ripples Nigeria on Sunday, the call was made at the 6th annual symposium of the Nigerian Microfinance Platform (NMP) organised by the Microfinance Learning and Development Center (MLDC), in Lagos, themed “Expanding The Frontiers of Financial Inclusion: The Microinsurance Option”.

Addressing participants at the event, Deputy Governor, Financial Sector Surveillance, CBN, Mrs. Aisha Ahmad, stressed the 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.

Represented by the Banks’ Deputy Director, Other Financial Institution Department, Mrs. Idowu Akinlade, Ahmad said financial inclusion, which entails affordable and available access to financial services by every adult in any given country also included insurance, however, she noted that insurance as a financial service 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,” she said.

Similarly, the Group Chief Executive Officer, Letshego Holdings, the parent company of Letshego MFB, Andrew Fening Okai, said MFBs should commit to building microinsurance as a product of necessity by adopting and developing clear value propositions while paying attention to simple but efficient distribution channels supported by easy claims resolutions.

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In his remarks, Managing Director/Chief Executive, Nigeria Deposit Insurance Corporation (NDIC), Hassan Bello advised the participants on factors MFBs need to consider in the provision of microinsurance services.

Represented by the Director, Special Insured Department (SIID), NDIC, Joshua Etopidiok, Hassan said the factors included: 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, President Chartered Institute of Bankers of Nigeria (CIBN), Bayo Olugnemi, 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.”

Similarly, Board Chairperson, AFOS Nigeria LTE, Adetutu Ogunnaike, said the need for inclusive microinsurance cannot be overemphasized, especially given the achievement of AFOS through the empowerment of low-income people.

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