NSSA’s sweet deal for informal sector

08 May, 2016 - 00:05 0 Views
NSSA’s sweet deal for informal sector Informal businesses are now the leading employer

The Sunday Mail

Africa Moyo
THE National Social Security Authority, whose mandate is to provide a safety net for local workers, intends to leverage on its investments in financial services and the mobile telephone business to cater for the informal sector.
Some of the planned products include retirement benefits and cover for injury at work, and disability insurance for informal sector workers.
NSSA recently obtained a banking licence for its National Building Society and has also ploughed US$30 million in acquisition of a stake in Telecel Zimbabwe.
It is envisaged that these investments will help provide cost-reflective payment channels for beneficiaries of its new and existing products.
NSSA chairman Mr Robin Vela told The Sunday Mail Business they intended to extend social security to millions of people “who are out of the safety net”.
“These Zimbabweans still require and will need at a later stage in their lives, the minimum income guarantee social security provides.
“Tapping into this market requires tailoring our products to suit the very informal nature of (the) sector where incomes are typically lower, come at irregular periods and are not paid through normal channels.
“This sector requires flexible and cost-effective payments channels which are well diversified.
‘‘Our aim is to come up with products that speak to the unique characteristics of the informal sector and leverage on mobile banking platforms through our investments in banks and mobile companies,” said Mr Vela.
The informal sector does not have products catering for both retirement and savings.
“Most of the informal sector workers have no fall back income in the event of injury at work and or reaching mature ages where they can no longer work and raise sufficient incomes,” said Mr Vela.
In 1989, when the NSSA Act was signed into law, the first stage of social security covered the formally employed with the informal sector and voluntary contributors coming in at a later stage.
Increased informalisation of the economy means there are now millions of people without social security cover.

. . . to provide low-cost houses

Africa Moyo
The National Building Society — the new banking unit of NSSA — is set to open its doors in the next two weeks. NBS is designed to deliver affordable housing to qualifying citizens “regardless of income bracket and social class”.
The country has a 1,25 million housing backlog and efforts are underway from both the public and private sector to avail affordable shelter.
Last week, NSSA chairman Mr Robin Vela told The Sunday Mail Business that the volume of housing units to be developed by the NBS would be in line with Zim-Asset targets and “availability of land across the country”.
“The targets will be reviewed yearly. Currently, the Zim-Asset target to 2018 has (300 000) housing units and the building society is expected, in the remaining two years, to deliver meaningful units of houses. NSSA is introducing the building society for the specific purpose of enhancing the country’s housing stock. The Board believes that the building society will have delivered on its mandate and impacted positively to the economy and country if it meets the ZimAsset housing targets and provides with affordable housing finance,” said Mr Vela.
NSSA used to be a source of cheap funds for banks, money which was then on-lent to borrowers at affordable interest rates, but market watchers have expressed concern that the facility may stop as the institution might prefer to lend directly.
But Mr Vela said the introduction of the NSSA building society would “not affect the continued economic role NSSA plays in giving direction to the financial markets through appropriate pricing of financial resources which are then used by various financial institutions for on lending”.

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