SMEs seek access to insurance services

THE Micro, Small to Medium Enterprises (MSMEs) says engagement with insurance service providers is critical in facilitating enhanced access to affordable social security schemes that protect small businesses and provide friendly banking operations.

Bulawayo MSMEs programme co-ordinator, Mr Nketha Mangoye Dlamini, said at the moment there were no specific insurance products suitable for SMEs.

He said it was for this reason that representatives from their sector have started engaging different insurance service providers to come up with flexible schemes for the informal sector.

Mr Dlamini said SMEs do not retire early but after retirement, they need some financial backup just like in other departments and to achieve this every business operator must have social security cover.

“We have been doing some exercises to handle the insurance issue on pensions and to ensure products and places where SMEs are operating their businesses are covered,” said Mr Dlamini.

“We are in discussion with different insurance service providers where some are trying to introduce pension schemes for SMEs. There is no product taking care of micro, small and medium enterprises.”
Mr Dlamini went on to say pensions are also important to SMEs as they can be used as collateral in accessing funds for the growth of their businesses.

“It’s easier for service providers to deal with registered formalised entities, be it vendors or SMEs. This will also assist in knowing their place of work and type of businesses they are into and it becomes easier for the insurance service providers,” he said.

During the 2023 national budget consultation held early this month, Bulawayo Vendors and Traders Association (BVTA) urged the Government to craft a national budget that would establish subsidised insurance, medical aid and pension schemes for players in the informal sector.

The association said the schemes would be targeted at cushioning traders in the informal sector from social and economic vulnerabilities as the sector has unique characteristics that need to be attended to.

Commenting on the BVTA suggestion, Bulawayo Chamber of SMEs chairman Mr Costin Ngwenya said SMEs are exposed when it comes to insurance and security schemes as they are beyond their reach.

“Government can provide the subsidised schemes. However, it should not be its responsibility alone, the private sector through the traditional providers of these schemes should go back to the drawing board and come out with tailor-made schemes, which should be affordable and sustainable to SMEs,” said Mr Ngwenya.

“We have other organisations like Econet, through EcoLife they have introduced a pension scheme for the SMEs, the scheme is affordable and sustainable and I am encouraging the SMEs to take advantage of it.”

Early this year, the National Social Security Authority (Nssa) prepared similar recommendations to the Government for a social security scheme for the informal sector.

National Security Authority (Nssa)

The proposed scheme is in line with Vision 2030 and the National Development Strategy 1 and is part of Nssa’s contribution to a prosperous upper middle-income economy by 2030.

Under the National Development Strategy 1 (NDS1), the blueprint that guides the country’s development between 2021 to 2025, unlocking the potential of SMEs is one of the critical steps towards fostering inclusive economic transformation.

SMEs have become dominant economic players in Zimbabwe but a majority of them still operate informally. It is for this reason that the Government has sought to prioritise the development of SMEs and facilitate their formalisation. — chronicle.co.zw