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Sikhulekelani Moyo, Business Reporter

SMALL to medium enterprises (SMEs) have commended the National Social Security Authority (NSSA)’s proposal to introduce a social security scheme that caters for the informal sector.

Responding to the structural changes in the economy, which has seen the sprouting of many informal businesses, NSSA has started developing a scheme to cover small businesses that are mainly excluded from social security protection.

National Security Authority (Nssa)

On Friday, NSSA acting general manager, Dr Charles Shava, told journalists during a virtual media mentorship launch programme that the informal sector scheme was inspired by the desire to bridge the sector’s needs.

He said the authority was already working closely with the International Labour Organisation (ILO) on the project with stakeholder engagement meetings lined up countrywide so as to get public views for suitable implementation.

Commenting on the development, Bulawayo Chamber of SMEs programmes coordinator, Mr Nketa Mangoye Dlamini, said the initiative by NSSA was noble as many players in the informal sector remain exposed to unforeseen social security risks.

“When we look at the informal or SMEs you find out that it consists of a group of people who are normally not using insurance,” he said.

“When organisations like NSSA take it upon itself to bring such schemes, it is a good development, which will also bring better ways of managing the sector.”

Mr Dlamini said most operators in the informal sector conduct business outside the formal economic structures hence they do not have risk cover in case of incidents of injury at work, loss of property to fire, accidents, theft or in case of medical requirements.

Outside of social security cover, he also challenged the insurance sector to tap into sector and come up with products that suit their requirements.

“We also need to look at the affordability of the product. As far as the premiums are concerned, products should be designed and underwritten in the sense that they are accessible and affordable to the informal sector,” said Mr Dlamini.

He suggested that NSSA and other insurance companies should do more to engage the informal sector and assist its members to grow and formalise.

Mr Dlamini also urged SMEs to formalise their businesses and embrace transparency and integrity to be able to access loans, secure big markets and win lucrative tenders.

“I continue to call our members to formalise their businesses so that if they get into a contract with an insurance company it becomes a proper contract with a registered and existing company, with an identified address,” he said.

SMEs continue to play a major role in the Zimbabwean economy as the sector has managed to employ the majority of the people. This has also seen the Government mainstreaming formalization in its strategies so that players can be able to participate in tenders and be able to access some critical services.
— @SikhulekelaniM1