Nigeria’s New Micro Pension Plan and Its Tech Implications

The president of the Federal republic of Nigeria Muhammadu Buhari recently launched the country’s Micro pension Plan in Abuja to resolve all pension issues despite the lean resources at its disposal.

The new Micro Pension scheme is designed to cater for people not gainfully employed in the formal sector.

Leveraging on existing technology will go a long way to making the pension scheme really successful, considering the fact that most of the population in the informal sector make up the unbanked population in Nigeria and are not easily accessible.

The process includes a prospective Micro Pension contributor opening a Retirement Savings Account (RSA) by completing a physical or electronic registration form with a Pension Funds Administrator (PFA) of his/her choice. The contributors may make contributions daily, weekly, monthly or as may be convenient to them. Every contribution shall be split into two, comprising 40% for contingent withdrawal and 60% for retirement benefits.

The contributor may, based on his/her needs, periodically withdraw the total or part of the balance of the contingent portion of his/her RSA, including all accrued investment income thereto. The contributor may also choose to convert the contingent portion of the contributions to the retirement benefits portion. The remaining balance in the contributor upon retirement or attaining the age of 50 years.

Digitizing the saving process will go along way to simplify the process, fintech startups like Asusu with deep penetration into the inner cities in Nigeria preaching the message of financial inclusion can be leveraged upon. with the Asusu app you can save daily, weekly and monthly and also apply for loans. The Asusu App already has over 100,000 users already

Traders and skilled workers in the non-formal sector are encouraged to embrace the Micro Pension scheme, in order to make their lives better even in old age