Micro, Small and Medium Enterprises (MSMEs) play a major role in lubricating the economic engine of nations. They are a significant force in creating jobs, reducing income disparities, and ultimately accelerating the GDP growth. According to the Ministry of Industry, Trade, and Investment, Nigeria has over 37.07 million micro, small and medium-scale enterprises, MSMEs, and they account for more than 84 percent of total jobs in the country.
They are also major drivers of innovation, skills, and competition in many economic sectors. Like every other business and endeavour, MSMEs are also exposed to risks. If their relevance to the growth and development of any nation is anything to go by, it then behoves that we bring to the fore, some frequent risks that pose threats to the growth of MSEMs.
So you have an MSME business, what are the risks your business is likely to face and what respites are there to mitigate or cushion their impact if they ever manifest?
- Hazards: These includes fire and other property damage, windstorm and other natural perils, theft and other crimes, personal injury, business interruption diseases etc.
- Financial Risks: From inflation to foreign exchange rates, commodity price to interest rate, your business can encounter different kind of financial risks that can impact your business operations.
- Operational Risks: In a market like Nigeria, MSMEs face peculiar operational risks. These risks include human capital, regulatory, environmental and even socio-cultural challenges such as the unsavory aftermath of the End SARs protest. If not properly managed, these risks can be a source of major challenges to running a sustainable business.
- Strategic Risks: Businesses are also exposed to reputational damage such as trademark/brand erosion, fraud, unfavourable publicity, Competition, Customer wants Demographic and social/cultural trends Technological innovation Capital availability Regulatory, political trends and so on.
Granted, the very nature of business is taking a risk against all the environmental challenges highlighted above and more. However, you can run your business with less worries about when and how these risks will impact your business.
One way to be able to squarely focus on your business is to have an insurance policy against the different kinds of risks that may occur. Fundamentally, certain risks have a high probability of manifesting in certain industries or sectors than the others. We advise that you carry out a constant environmental and severity of impact assessment to identify those peculiar to you or with higher possibility of disrupting your business. Regardless of the kind of business you run, having an insurance policy is one of the surest way to mitigate against risk factors.
With a deep understanding of Nigeria’s business environment, AXA has developed an insurance solution (Business Insurance Plan) that have taken these risks and more into consideration and design to cover you and your business.
AXA Business Insurance Plan provides protection to business owners, business content and their employees. The Business Insurance Plan (BIP), is a one-stop insurance solution that addresses the business risk exposures of small and medium enterprises. It is a pot-pourri of several existing AXA Mansard insurance products bundled together. These products include Business Content, Group Personal Accident, SME Life, Health Care Public Liability and many more.
At AXA, you should be able to run your businesses with full confidence that your goals can be achieved and your business can continue to contribute to the economic development of Nigeria.
AXA Mansard provides you with great financial solutions including protection, asset management and health insurance. For more information, call us on 0700 AXA MANSARD (0700 292 6267273) or send an email to ccare@axamansardhealth.com
