AFOS-INGO-NIG projects in
Micro Insurance and Business Continuity is equipping Microfinance Banks to
recover from loan loss and support Micro-entrepreneurs to quickly recover from
financial shock and business crisis. Through the AGRAR II project in Nigeria,
AFOS is giving attention to Business Continuity Planning and Micro Insurance,
to prepare microfinance institutions in Nigeria for economic shock absorbance
and resilience to provide immediate support to small businesses and vulnerable
people in the face of crisis and resultant economic disruptions. Read
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2020
marked the dawn of significant events in the business and social environment –
increased banditry and terrorist activities, the COVID19 Pandemic, EndSARS
movement, currency devaluation and the sharp depreciation of the Naira in the
parallel market, as well as the impending Microfinance Banks recapitalization
programme, etc. The effect of these shocks is disruptive to businesses, but
more especially critical for microfinance institutions that serve as last line
of defense for the poor and vulnerable groups, helping these ones to invest in
microenterprises, save and maintain liquidity – services that are particularly
critical during these periods of crisis and economic downtime in Nigeria when
small and medium-scale enterprises have a need to remain capitalized.
The
concept of the AFOS’ Business Continuity Plan (BCP) programme is to establish
risk management techniques and practices that aim to prevent disruptions to
mission-critical services of the microfinance institutions, ensure the MFBs
maintain vital operation during and after a crisis or disaster occurs and to
quickly restore an institution to its full functionality. Hence, it directs the
MFBs to focus on their preparedness to adequately respond to planned and unplanned business environment changes. A workbook was developed in the
course of the capacity development activity and has been distributed to MFBs
across the microfinance industry, so far, about 5 microfinance banks have used
the workbook as a guide to developing/review their own Business Continuity
Management manual.
The
AFOS Microinsurance project targets low-income individuals and micro to
small-sized business enterprises through the Nigerian microfinance industry
because microfinance is a proven vehicle to reach low-income and
economically active poor. Working with microfinance banks in Nigeria, the
objective of the project is to create a microinsurance product that will
provide MSMEs with access to insurance services to cover for common risks such
as death, injury or illness, crisis/disasters, and theft which can obviously cause
declines in their well-being and productivity and threaten the sustainability
of their businesses.
Ultimately,
the goal is that Microfinance banks can collectively establish a Microinsurance
company that can cater for the insurance needs of the poor, cover MSME business risks, and provide recapitalization opportunities for their
micro clients in the face of disaster, crisis, or pandemic. AFOS-NIG INGO has
so far, trained 298 participants across 185 microfinance banks in all the six
geo-political zones in Nigeria on the topic – of Microinsurance Product
Development. The project is now ultimately leading to a sector-wide drive
that would help micro, small and medium-sized businesses become more productive
and sustainable even in the face of disaster.
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