ANALYSIS OF THE CONTRIBUTION OF INSURANCE COMPANIES TO THE GROWTH OF SMEs: A CASE OF NATIONAL INSURANCE CORPORATION
(A CASE OF NATIONAL INSURANCE CORPORATION)
By
MWANGI LOISE WANJIRU
Presented To
Department of Insurance
ABSTRACT
The purpose of this study was to establish the relationship between the contributions of insurance companies and the growth of SMEs in NIC basing on the following objectives; to examine major factors that affects the growth of SMEs; to assess the contribution of insurance companies to the growth of SMEs; to investigate the factors inhibiting the purchase of insurance cover by SME operators and to determine the strength of the relationship between insurance companies and growth of SMEs.
The research was descriptive in nature involving quantitative methods which was administered through questionnaires. The total sample comprised of 65 respondents of all the managers and employees of National Insurance Corporation. Simple random sampling was used whereby the researcher went to NIC and administered questionnaire to the sampled or selected employees. Primary data was obtained from the library materials, textbooks, NIC brochures, internet and journals. Data analysis was carried out using SPSS and frequency distribution tables.
Findings revealed that innovation is a strong empirical evidence for fast growing SMEs, competition has a great effect on SMEs industry and credit remains a great challenge to the growth of SMEs. Besides that insurance companies mitigate risks and enhance loan acceptability by SMEs sector with banks. However low income earned by SMEs, high premium cost and paperwork and experience and beliefs inhibit the purchase of insurance cover by SMEs. Nevertheless, there is a strong positive relationship between insurance companies and the growth of SMEs at Spearman Correlation Coefficient.
It was concluded that improvement in business skills increases the performance of SMEs. However insurance companies do not lowers insurance rates and offer protection to SMEs income statements. In addition SMEs being small in size and their inability to fully understand the document limits them to get insurance cover. It was recommended that management of NIC need to build a great relationship with SMEs as their customers in orders to develop and grow them in trust and also lower the premium rates to SMEs in order to improve on their performance. Also NIC need to have a fresh look at the scope and spectrum of services provided to SMEs and has a better understanding on the scale of enterprise sector.
TABLE OF CONTENTS
Cover page - - - - - - …….. - ……. - ……i
Declaration - - - - - - - - - - ..ii
Approval - - - - - - - - - - - .iii
Dedication - - - - - .. - - - - - iv
Acknowledgement - - - . - - - - - - .v
Table of contents - - - - - - - - - - .vi
List of tables - - - - - - - - …. - - ix
Acronyms - - - - - - - - - - - x
Abstract - - - - - - - - - .. - …xi
CHAPTER ONE - - - - - - - - - - .1
INTRODUCTION 1
1.0 Background of the study 1
1.1 Statement of the problem - - - - - - - …… - 2
1.2 Research objectives 3
1.3 Research questions 3
1.4 Purpose of the study 3
1.5 Scope of the study 3
1.6 Significance of the study 4
CHAPTER TWO 5
LITERATURE REVIEW 5
2.0 Introduction 5
2.1 Meaning of SMEs. 5
2.2 Factors affecting the growth of SMEs - - …… - - - - …6
2.2.1 Performance indicators of SMEs - - - - - …..… - .13
2.3 Meaning of insurance - - - - - - - - - 15
2.4 Contribution of insurance companies to the growth of SMEs - - - .16
2.5 Factors inhibiting the purchase of insurance by SMEs - - - - 19
2.6 Relationship between insurance companies and growth of SMEs - - …..22
2.7 Conclusion - - - - - - - - - … - 23
CHAPTER THREE 25
RESEARCH METHODOLOGY 25
3.0 Introduction - - - - - - - - - …..25
3.1 Research design 25
3.2 Survey Population - - …….. - - - - - ….….25
3.2.1 Sample size 25
3.2.2 Sample design 26
3.3 Data Sources 26
3.4 Data collection 26
3.5 Measurement of Variables 27
3.6 Validity and Reliability of instruments - - - - - - 27
3.7 Data analysis 28
3.8 limitation of the study - - - - - - - - ..28
CHAPTER FOUR - - - - - - - - …… - .29
DATA ANALYSIS, PRESENTATION AND INTERPRETATION… - - ….29
4.0 Introduction - - - - - - - - - …..29
4.1 Response rate - - - - - - - - - - 29
4.2 Personal data - - - - - - - - - - .29
4.3 Findings on factors affecting SMEs growth - - - - - - .31
4.4 Findings on contributions of insurance companies to the growth of SMEs - - .34
4.5 Findings on factors inhibiting the purchase of insurance cover - - ……..35
4.6 Findings on relationship between insurance companies and the growth of SMEs….36
CHAPTER FIVE - - - - - - - - - .38
DISCUSSION & SUMMARY, CONCLUSION AND RECOMMENDATIONS - .38
5.0 Introduction - - - - - - - - - …..38
5.1 Discussion of the findings - - - - - ……. - ……..38
5.2 Conclusion - - - - - - - - .. - ….41
5.3 Recommendation - - - - - - - - … - ..42
5.4 Areas for further research - ….…. - - - …….. - - 42
REFERENCES 43
APPENDIX I. .……. - - - - - - - - … - .
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