Following approval of the National Pension Commission (PenCom), of Sigma Pensions’ non-interest Retirement Savings Account (RSA) fund, experts have predicted greater financial inclusion in the nation.
Sigma Pensions has launched Nigeria’s first non-interest Retirement Savings Account (RSA) fund, providing retirement savings aligned with moral beliefs and values skewed towards ethical investing, making it the first Pension Fund Administrator (PFA) to do so.
Speaking at the launch, the chairman, Board of Directors, Sigma Pensions Limited, Mr Mark Collier noted that the fund would drive greater financial inclusion among an underserved segment of the Nigerian population, as well as deepen financial inclusion and pension enrolment.
He explained that “Sigma Pensions has launched RSA Fund VI for our esteemed customers and the general market alike for RSA account holders who are desirous of having their pensions managed along principles of non-interest.
“Having a vibrant non-interest pension offering will help deepen the breadth and sophistication of the domestic pension and non-pension fund management industry. A key tenet of robust financial markets is the existence of many players on both demand and supply having diverse opinions, desires and needs which allow for a more efficient price setting mechanism.
“It will help drive greater financial inclusion and pension enrollment. Nigeria’s financial exclusion rate is estimated at 37 per cent with large exclusion observed in the northern regions. Among other reasons, the reluctance towards the formal financial sector amongst certain Nigerians likely reflects unease at the absence of a recognition of their ethical principles in the design of banking and finance products. With the option of retirement savings products suited to non-interest preferences, it is easy to see a ready outlet for raising financial inclusion.”
He further added that his firm has set up backend operations with a highly capable investment team with a well-crafted investment strategy to ensure seamless transition for new and existing RSA account holders to migrate to Sigma Fund VI.
“We believe strongly in Nigeria and find strength in its ethnic and religious diversity. And with Fund VI, we believe we have a product that meets the desire of a long-underserved segment of the Nigerian population to actively plan for their post-work lives by taking advantage of a tailored financial market product consistent with their beliefs.”
On his part, the managing director, Sigma Pensions, Mr Dave Uduanu said, “The launch of the Sigma Pensions Non-Interest RSA Fund VI marks another first by Sigma Pensions as we continue to trailblaze in the Nigerian Pension industry.
“This product is particularly unique because for the first time ever in our market, it allows pension account holders to be able to have pension solutions that align with their beliefs and values. We thank the National Pension Commission for opening up this window to foster financial inclusion in our country.
“Particularly, this fund seeks to invest pension savings in assets that are not interest yielding, into the production or trading of alcohol, pornography, weaponry, gambling/betting, speculation and other ventures of similar nature.
“In the course of our market research, we discovered that worldwide, on average non-interest investments have provided better risk adjusted returns than conventional investments.
“Even in our local market, we see that non-interest investment options have provided better risk adjusted returns. Take for example, the NGX Lotus Islamic Index, since inception in 2012, the index has generated annualised returns of 12 per cent, which compares to the NGX Pension index annualised returns of 10 per cent.”