The Nation Newspaper

Tag: penetration

  • Omo introduces new pack for more market penetration

    It was excitement all the way in Abuja as Unilever Nigeria Plc was in the Federal Capital Territory (FCT) to formally introduce the new 100 gram pack of its Omo Fast Action detergent to residents.

    The Omo entourage led by popular actor and Omo brand ambassador, Ali Nuhu made door to door stops at the Nyanya, Mararaba, Lugbe, Kubwa, Kuje and Gwagwalada areas of the city where he handed out complimentary packs to families while informing them of the improved qualities.

    According to Nuhu, Omo has been a leading brand for decades and people have come to trust it for the effective cleaning power and ability to handle tough stains on laundry. He explained that the new 100 gram pack was being launched to make the product more affordable and accessible to a larger section of the consuming public.

    Assuring on the quality, he said: ”It is the same Omo with superior stain removing power in more affordable pack and it only costs N50,” adding that there is no better alternative in the market today.

    Mrs. Abibatu Jimoh, one of the spectators, who also took part in the demo wash, expressed her satisfaction with the detergent, saying: “My experience today with Omo has further strengthened my resolve to remain loyal to the brand.”

    Hadiza Joseph a mother of three who received a complimentary pack lauded the brand for such an initiative. “We used to use Omo in my father’s house while growing up but when I got married, we started trying other detergents available in the market. Today, after trying this new Fast Action, I am more than convinced that it is the best out there! This visit by Ali Nuhu and the team has helped me find my way back to Omo,” she said.

  • ‘Weak credit system cause of low insurance penetration’

    The Nigerian credit market needs to be opened up to assist in bridging the gap of low insurance penetration bedeviling the insurance industry, analysts have said.

    Nigeria’s insurance penetration according to recent statistics stands at abysmally 6.5 percent, while the contribution to the nation’s Gross Domestic Product (GDP) is less than one percent with a population of over 170 million people.

    The analysts made their views known at a seminar on “Retail Insurance Business- a Begging Challenge,” held  in Lagos and organised by HR Nigeria Limited, consultants and actuaries. They believe that the country’s underdeveloped credit system, which has failed to bolster demand for supporting products including consumer goods and services is a major factor slowing insurance penetration.

    They stated that other markets within and outside Africa succeeding in insurance are strong in the offering of credit facilities to the populace, and this in itself creates an immediate need for insurance. According to them, insurance provides support for mortgages, loans, car financing, as well as asset acquisition, which do not only drive purchases but also increase penetration of insurance.

    They also asserted that credit in itself creates an immediate need for insurance, support for mortgages, loan acquisitions, car financing as well as asset buying particularly household equipment.

    Looking at other challenges bedeviling the insurance industry, they observed that there is a perceived lack of confidence in the insurance industry, the key concern resonating that “insurers do not pay claims.”

    Beyond that, they also identified the lack of regulatory support for non-traditional distribution channels namely “corporate agents” for insurance like mobile network providers and bancassurance.

    Some practitioners, however, brought the regulator – the National Insurance Commission, under fire because they felt that the best way to invoke change was by regulatory changes especially in becoming less stringent on licensing of alternative distribution channels.

    The Managing Director, Custodian and Allied Plc, Wole Oshin, said the issue mentioned is important and needs the attention of  NAICOM. He said NAICOM need to liase with the Central Bank of Nigeria (CBN), otherwise achieving penetration like other markets would be difficult.

    Jim Roth of Leapfrog Investments stressed the importance of understanding the target market, stating that compulsory insurances, mobile insurance as well as partnerships were distribution channels that succeeded in other markets. He said that another successful approach undertaken by Leapfrog to improve the perception of trust of the insurer was by partnering with a well-known, trusted non-insurance brand.

    He however faulted the traditional agency route of selling insurance, which is currently the major model here.

    The Chairman, Claims International Limited, Ope Oredugba, stated that efforts must be geared towards reaching out to the emerging consumer group, with the kind of products that will not only meet their development needs but also reasonably affordable.

    NAICOM Deputy Commissioner, George Onekhena stated that the Commission was already looking at distribution and may soon come up with a policy on the development. He however, stressed that a major challenge facing the development of the industry is premium leakages, and called for strategic efforts by operators to reach out to the mass of the uninsured public.

    He noted that poverty is a major problem in our society and many cannot afford to buy insurance. He said a strategic effort to empower the populace would bring them closer to insurance.

  • ‘Broadband penetration vital to online business growth’

    The Managing Director, Shop to My Door, an online trading platform, Mr Nduka Udeh, has said broadband penetration is needed to boost online trading in the country, adding that efforts of the government in this direction will address the issue if purposefully pursued.

    According to him, broadband availability has helped the firm to stabilise, arguing that when it first started, is started paying as much as $1,000 per month for a 256 kilo watt per second connection but now, it is just $100 for a four mega bytes per second connection.

    “So the cost of bandwidth has been falling and it is good for online trade,” he said.

    He said online shopping provides users a save, convenient and dependable means of purchasing items, adding that in spite of the teething problems confronting the sub-sector, it will continue to grow and contribute to the nation’s gross domestic product (GDP).

    Speaking at an ATM & Card Expo at eko Hotel & Suites, Victoria Island, Lagos, he said most people fail to realise that the money they ought to have saved shopping online by way of clearing and forwarding costs are taken off their necks when they shop online.

    According to him, with offices in the United Kingdom (UK), United States (US) and China, all the clients needed to do is use their automated teller machine (ATM) cards to shop from online stores in those with ease at the comfort of their homes and get it delivered between three and four days or four and six weeks depending on the type of shipping they desire.

    According to Udeh, fears about the security of online transactions may be keeping some people away from taking advantage of the platform, he however said the platform deployed by the firm is such that does not store the data of the customer, saying once the transaction is carried out, nothing concerning the card holders is ever stored.

    He said: “We encourage customers to pay for their items online and whenever they are having difficulties with it they pay through our website. Shop to My Door operates on a platform that doesn’t store cardholders’ data and once the payment goes, the card details automatically deletes. We use FFL encryption, verified by Visa and MasterCard’s secured option.”

  • Mutual funds plans distribution channels to drive penetration

    Fund Managers’ Association of Nigeria (FMAN) plans to es-tablish a nationwide distribution platform that will make mutual funds available in every nook and cranny of the country.

    Its President, Mr. Michael Oyebola, said FMAN aims to raise the profile of fund managers as well as promote and increase awareness of their expertise in managing segregated investment mandates and mutual funds.

    According to him, one of the key objectives of FMAN over the next two years is to establish a robust fund distribution platform for all Securities and Exchange Commission (SEC)-registered fund managers.

    Oyebola, who is also the Managing Director and Head of FBN Capital Asset Management, a member of FBN Holdings Plc, said while there is dearth of knowledge about the investment market, there has been increased penetration in recent period.

    “Investors are showing more interest in income generating mutual funds and so we do anticipate a trend in either existing mutual funds paying a dividend or investment houses launching dividend paying products,” Oyebola said.

    He said FBN Capital has been working to address the dearth of knowledge about the potential of mutual funds, particularly for investors looking to spread risk.

    According to him, FBN Capital promotes knowledge and awareness of mutual fund investment, while members of firm are working closely with the SEC on the Capital Markets Literacy Initiative, which aims to develop national strategies for financial education.

    Last October, FBN Heritage Fund paid its first dividend to its various unit holders, after a challenging period. Oyebola said what motivated this decision was the successful turnaround of the Fund’s performance.

    “The Fund performance was affected in 2008 following the global financial crisis where we saw many stock markets, including Nigeria’s, significantly underperform. As a result of the consistently strong performance that we are experiencing with the fund, we are now able to reward our loyal investors with a N10 per unit dividend,” Oyebola said.

    He said the firm’s strong positive returns are a result of its ability to accurately anticipate and respond quickly to changes in the debt and equity markets.

    According to him, the first half of last year was characterised by an increased allocation to equities at the expense of money market exposure, as money market yields were relatively low and the firm saw opportunities in the equity market. Its overweight position in equities meant the Fund benefited from the strong performance of the Nigerian Stock Exchange (NSE).

    Speaking on investment choices, he said the FBN Heritage Fund is an ideal mutual fund for investors looking to build wealth.

    “In fact, all of our mutual funds can help you build wealth. Another option is the FBN Money Market Fund, which provides investors with stability, some income and typically offers higher rates when compared to a standard bank savings account. It is a low risk mutual fund.

    “Also, the FBN Fixed Income Fund provides a regular income with exposure to the bond and treasury bills markets. The FBN Heritage Fund provides superior growth for your money by investing across a number of different asset classes. The mutual fund is recommended for customers looking to build wealth through a single diversified fund and offers competitive returns,”Oyebola added.

    He however noted that the choice of which fund to invest in will ultimately be based on the investor’s appetite and objectives adding that FBN Capital provides professional advice and enlightenment on this.

    “Our mutual funds can help meet savings and wealth building needs, whether it be saving to go on holiday, buy a car or a house, saving for your children’s school fees or even saving towards a stress free and enjoyable retirement. We already invest on behalf of thousands of Nigerians, both here and abroad, who have entrusted us with helping their money to grow,” Oyebola said.

     

  • ‘Internet penetration stands at 6%’

    ‘Internet penetration stands at 6%’

    • $25b spent on telecoms infrastructure

    Minister of Communications Technology, Mrs Omobola Johnson, has said over the last one decade, a total of $25 billion has been spent in the provision of telecoms infrastructure, lamenting that a paltry six per cent internet penetration has so far been achieved.

    She said a lot more funding is required if penetration is to be deepened, adding that overnment will focus on the provision of the physical infrastructure and place emphasis on affordability.

    Omobola who spoke on Bloomberg TV during her recnt visit to Sillicon Valley, the United States of America (USA) to showcase the potentials of the nation’s information communication technology (ICT) sector, said her misison was not to create another Sillicon Valley in Nigeria but to take some lessons away from the experience of the US, especially how Sillicon Valley has helped to build big IT companies.

    “Nigeria is a fast growing IT industry. It has been grwoing at 20 per cent over the last five years,” she said, lamenting that local content has been so insignificant.

    “What we are trying to do is create more Nigerian companies. We are here at Sillicon Valley to learn how Sillicon Vallye has helped to create some of the largest IT companies in the world. What is it that they have done? We are not trying to create another Sillicon Valley but trying to see what they have done (in order to domseticate that in Nigeria) to create more local companies,” she said.

    According to her while mobile subcription has passed the 1000 million mark, the same could not be said of internet penetration which she put at 45 million out of a population of 170 million people.

    “Internet penetration is important. Obviously we have a long way to go. So for us, the priority is first to connect the physical infrastrucure and then we talk about access and affordability,” she said, lamenting that 70 per cent of the population are still the rural folks without “significant earning capacity.”

    She said after putting the physical infrastructure in place, the next prioroty will be to drive affordability which will impact on accessibility because a lot of the youths have been excluded from the benefits arising from e-health, e-education and others associated with the internet.

  • Govt accused of stalling insurance penetration

    WORRIED by the inability of the government to honour its insurance laws, practitioners have called on the federal, state and local governments to insure their assets. This, they said, will go a long way in helping the sectors’ leadership to deepen the practice of insurance in the country.

    Captains of the industry, who spoke with The Nation, said there is need for the government at all levels to support the industry. They said though the Federal Government has shown some positive interests in the insurance business, appropriate premiums should be made available to pay for government’s covers.

    The President of the Nigerian Council of Registered Insurance Brokers (NCRIB), Mrs Laide Osijo, said the government should not undervalue its assets as has been the practice, adding that there is need for the government to further protect the industry by living up to its responsibility, as the largest insurance client.

    He said the undervaluation of government’s assets is capable of slowing the pace of development of insurance industry.

    Mrs. Osijo said situations where insurance assets are not properly evaluated, leading to inappropriate rates and premium, it could result in the diminution of the growth and depth of insurance penetration in the country.

    She said the government should make it a priority to attract foreign investment into the country in to grow insurance capacity, among other things, and ensure that violation of insurance laws are met with appropriate sanctions.

    Also, the President, Chartered Insurance Institute of Nigeria (CIIN), Dr Wole Adetimehin, called on governments to support the insurance industry by procuring policies to cover their risks.

    He noted that such patronage would help to promote service delivery and enhance international best practices.

    He said there are compelling reasons why the citizenry and governments should take insurance more seriously, adding that Nigerians are under threats from risks emanating from natural disasters, such as floods, rainstorms and security, which have taken their tolls on the citizenry.

    He argued that low insurance contributions to the economy stemmed from lack of necessary infrastructure, which prevent people from buying insurance.

    “With unemployment at an estimated 23.9 per cent in 2012, the insurance business in Nigeria is hardly able to improve on its contribution to the nation’s GDP above one per cent, unlike in South Africa where it is 15 per cent,” he said, adding that the reason for this is because people are apparently laden with costs which are channelled at the procurement of otherwise basic and fundamental needs, such as electricity, water and security.’’

    The President of the Risk Surveyors Association of Nigeria (RISAN), Jacob Adeosun, said if the government has taken the insurance its assets seriously, when crisis arise like the floods that have have ravaged most coastal communities, the insurance industry would have come to their rescue.

    He criticised the situation where the government takes money budgeted for other things to solve or replace state properties when they are damaged, saying the insurance industry would have done that had the government insured the assets and paid premium, accordingly.