Micro-Pensions framework on cards
The Insurance and Pensions Commission (IPEC) says it is working on a Micro-Pensions regulatory framework to cater for the country’s informal businesses as a way of enhancing financial inclusion for this previously excluded sector.
This follows the introduction of a Micro-Insurance regulatory framework in the second half of last year, which also facilitates provision of insurance to low income earners.
Zimbabwe`s informal sector could be the sixth largest in the Sub-Saharan region, contributing between 40 and 50 percent to economic growth.
IPEC Commissioner Tendai Karonga, told The Herald Business that the crafting of the Micro-Pensions framework was already at an advanced stage and they are only awaiting Government approvals.
“We are working on the creation of a Micro-Pensions regulatory framework, which will cater for people with remittent employment that is those with no fixed income. IPEC wants to create a pension system for the informal market,” said Comm Karonga
Comm Karonga could not, however, give details of the framework arguing that they will be available once Government has made necessary consultations regarding the framework.
“At the moment we are working on the framework itself and once we finalise it we will then announce it. We are not able to give exact details when it will be out because we are waiting government approvals,” he said.
Comm Karonga said setting up of the framework dovetails with the United Nations Sustainable Development Goal number one — that of eliminating poverty.
“Most of our people are employed in the informal sector and we expect this sector to grow but there is something that we need to tackle that is pensions for the informal traders, so that they will have something to fall back on during their retirement period.
“One of the advantages of a Micro-Pension is that it will improve our ability to reduce old age poverty because one will have some income in old age and it will fit in with sustainable development goal number 1,” said Comm Karonga.
The informal sector contributes over 60 percent of employment in the country.