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Enacy Mapakame
The Ministry of Women Affairs, Community, Small and Medium Enterprises Development has started incorporating insurance matters into training programmes for micro, small, and medium enterprises (MSMEs).
The initiative aims to boost literacy in risk management and insurance for budding businesses while also enhancing insurance inclusion.
This comes as the Ministry facilitates the training of, on average, about 35,000 MSMEs every year on business management and other business-related issues. Last year, approximately 40 000 MSMEs received training.
However, the Ministry has noted that programs on insurance and related matters have been lagging, despite the crucial role it plays in businesses.
Speaking at the inaugural Training of Trainers on Risk Management and Business Insurance for Business Development Officers in Harare yesterday, Permanent Secretary in the Ministry Dr Mavis Sibanda acknowledged this anomaly. She, however, applauded the organizers for the initiative to capacitate the MSMEs in risk management.
“The ministry has over the years been providing training to MSMEs on other facets of business excluding insurance. The training being conducted today is going to empower you to also include insurance and risk management in our training programmes,” she said.
“I am informed that this is the first session of a series of training sessions where about 120 officers will go through this training programme. I am excited with this initiative taken by ICZ in unmasking and demystifying this animal called business risk as well as mainstreaming of insurance in MSME training initiatives.
“I am confident that by the end of these training of trainers sessions, the Ministry will have competent officers providing insurance training and raising awareness to SMEs nationwide enabling the sector to embrace risk mitigation measures for their businesses,” said Dr Sibanda.
Insurance plays a critical role in the growth of MSMEs by mitigating threats through risk management. It can provide much-needed financial support for complex business exposure risks, such as reputational risks, trade secret risks, political or regulatory risks.
It is also crucial for sustainability. MSMEs are unlikely to afford large losses caused by business interruptions or closures, loss of income, supply-chain delays, or damage to neighboring properties.
This is a challenge experienced not only in African economies but a global challenge where literacy also impacts on insurance inclusion by the sector.
Many SMEs worldwide, especially in developing countries, do not have adequate insurance policies that indemnify them against other financial or asset losses.
This is despite the critical role the sector plays in helping sustain the economy. In Zimbabwe, the sector is estimated to account for 60 percent of economic activity.
“Although the sector is immensely contributing to the national economy, SMEs continue to face a number of challenges which include lack of business management skills, mentorship, coaching, markets, workspace business and financial linkages.
“There is also a general lack of appreciation of risk mitigation and insurance among MSMEs as a tool to mitigate risk putting the continuity of economic activities within the sector in doubt should mishaps occur,” said Dr.Sibanda.
Online Reporter