Africa-Press – Uganda. The Uganda Insurance Regulatory Authority has urged Micro, Small, and Medium Enterprises (MSMEs) not to view insurance as a luxury item, rather than the essential safety net it is.
“In an increasing uncertain world, growth doesn’t come only in being courageous but also being prepared. It also comes with confidence as well. Insurance therefore exists to protect your gains. It is not a luxury for large companies as many think. On the contrary, you may realise that you might need it more than big ones. You need to be protected in order to have business continuity. It is therefore important to recognise insurance as practical tool for business survival and continuity,” IRA CEO, Al Hajji Ibrahim Lubega Kaddunabbi said.
He was on Tuesday speaking during a half-day engagement with MSMEs which are members of the Uganda Small Scale Industry Association (USSIA) at IRA headquarters in Kampala.
The engagement was aimed at equipping them with practical knowledge on how insurance can mitigate risk, support business continuity, and enhance investment confidence amidst operational and sustainability-related uncertainties.
Kaddunabbi said MSMEs present a force that drive and sustain Uganda’s economy, noting that the engagement is timely to ensure they align.
“Small and medium scale enterprises are not a side story in Uganda’s economy but are the real story. They are the main reason economy moves. Majority of these businesses in Uganda provide livelihood to millions of Ugandans and central in national aspirations of the vision 2040.We are aware that small scale industries are not small in impact, they are innovators, job creators, problem solvers and quiet heroes. These enterprises account for approximately 90% of private sector production and approximately 2.5 million people employed by these enterprises. They generate 80% of the manufactured output and contribute approximately 20% of the GDP,” Kaddunabbi said.
“This means these enterprises power our everyday lives and nurture talent and turn ideas into livelihoods. MSMEs are a very important sector of the economy but we have noted that they operate in a high risk environment and things like fire, theft, equipment breakdown, accidents, health emergencies are realities they face every day and can disrupt or completely take them back to the village.”
He said the engagement is meant to ensure MSMEs get knowledge about insurance and how they can make it part of their daily business.
“While many small businesses remain uninsured or under insured limiting their protection , it comes as a result of limited awareness and here we want to inform them of what they need and how to get more information about insurance.”
He said the global SME insurance market is growing rapidly and currently valued at US467 billion and expected to increase to USD 858 billion by 2035, which he said means many SMEs around the world are increasingly insuring against their operational and financial risks.
Kaddunabbi as quick to note that this trend ought to be followed by Uganda MSMEs.
He told them that IRA is working with insurers to promote affordable and simplified products tailor made for SMEs.
“Insurance is about continuity not just compensation. When your business is insured, you protect your ability to reopen, fulfil contracts and sustain livelihoods even after a loss. You need to be assured of that continuity. The insurance market in Uganda is evolving. There are SME and micro insurance products designed to match the scale of SMEs. You are encouraged to engage licenced players. You don’t need to buy a product like so and so bought but invite the insurer to propose a product to fit your business,” he urged.
Kaddunabbi asked MSMEs to always seek clarity on what their cover must be and what their obligations are.
Speaking about the engagement, Jose Mulindwa, the chairperson of SMEs in Kampala under USSIA welcomed the initiative by the Insurance Regulatory Authority.
“Whereas many SMEs have had issues like fires and thefts among others, we had nowhere to run to. There were always rumours that insurance could help us but we didn’t have concrete information about how it works. The engagement has helped us know how beneficial insurance is and we believe as SMEs going forward, we will take up insurance,” Mulindwa said.
“It is true sometimes we have been fearing to take up insurance because we always thought it is for big business personnel but the engagement has demystified the myths that it is not how big the company is but rather how you want continuity of your business to be.”
