MTN Nigeria, Mansard create insurance scheme for SMEs
Operating within a country determined to create an enabling environment for Small and Medium Scale Enterprises (SMEs), MTN Nigeria and indigenous insurance provider Mansard have unveiled an insurance scheme for SMEs in Nigeria, the overall idea being to provide the necessary affordable insurance solutions that SMEs need in order to run their operations with peace of mind.
The new service will be made available under an MTN product called ‘Y’ello Biz’ and interested SMEs can subscribe for the service with N300 ($1.51) a week in order to enjoy N1m ($5000) mansard insurance cover for their businesses.
Reports indicate that the insurance package covers registered SMEs against fire, flood and other risks. Also, the Y’ello Biz can be bundled with voice, data and SMS services, as it is from the stable of the MTN Y’ello Cover; a suite of insurance services offered by MTN to its network subscribers.
Mr Yomi Onifade, Director of Retail Business at Mansard Insurance, indicated the willingness of the financial services provider to undertake the scheme and contribute its quota to promoting SME development in Africa’s largest economy. “Mansard was pleased to extend its customer-focused insurance services to the SMEs, covering some of the most frequently occurring business hazards,” he said.
Also commenting on the development, Mr Tsola Barrow, Acting Chief Enterprise Solutions Officer at MTN, said, “At MTN Business, we believe that the SMEs are the anchor of local economies and, as a critical agent for national economic development, we believe in enabling not only big businesses but also small businesses.”
The insurance market in Nigeria is largely underdeveloped as it is currently perceived as a service for the “elite,” and something “ordinary” people need not enrol for. Certain sources have speculated that the insurance penetration in Africa’s largest economy may be a mere 0.5 percent. According to an Enhancing Financial Innovation and Access (EFInA) report, less than 1 percent of Nigerian adults have insurance despite the fact that third party vehicle insurance and group life insurance have been made compulsory by law.
Because of these gaps, there is a growing focus on a scaled down version of insurance called “micro-insurance” and defined by experts as “insurance accessed by the low-income market.” The keys to ensuring this form of insurance is widely adopted will be affordability, accessibility and appropriateness for the target market. The service also requires innovative approaches in distribution such that it is delivered in a cost-effective manner to people who may not be formally employed or financially included.
There is a valid question of whether micro-insurance is viable in Nigeria, and the “Y’ello Biz” service, if successfully adopted by its target market, may be a suitable response.