DETERMINANTS OF UPTAKE OF INSURANCE SERVICES AMONG SMALL AND MEDIUM ENTERPRISES IN NAIROBI CITY COUNTY, KENYA

Abstract

Though SMEs contribution to the economy is high and important, this may be affected adversely by accidents, tragedies and natural calamities. In the recent past, there has been a high prevalence of fires and floods in Nairobi City County. Despite the existence of SME's in Nairobi County for a long period now, the majority seem to have exhibited high mortality, slow or no growth. The study intended to establish the determinants of uptake of insurance services among the SMEs in Nairobi city county, Kenya. The population of the study consisted of 100 SMEs in Gikomba Market. Proportionate stratified random sampling was employed to collect data from the SMEs to actualize the objectives of this research. Information was collected by use of a questionnaire which consisted of both open and closed ended questions. Data was edited for accuracy, uniformity, consistency and completeness and arranged to enable coding and tabulation for final analysis. Data was analyzed using SPSS version 22 and Ms. Excel. It was notable that there existed strong positive relationship between the indepedent variables and depedent variable. The study recommended a need for the management supports the managerial skills for the managers and employees to facilitate uptake of insurance services in the businesses. The entrepreneurial culture should be good in the businesses. Before the entrepreneur enter in the run of the business should have adequate experience to understand the need of the uptake of the insurance services.From the findings of the study, it was revealed that own capital or saving was the most source of funding of the uptake of insurance services in Nairobi City Count. The study was a milestone for further research in the field of uptake of insurance services in Africa and particularly in Kenya. The findings demonstrated the important factors to uptake of insurance services to include; access to finance and access to business information services. The current study should therefore be expanded further in future in order to determine the effect of strategic legal framework on uptake of insurance services. Existing literature indicates that as a future avenue of research, there was need to undertake similar research in other areas in Kenya and other countries in order to establish whether the explored factors can be generalized to affect uptake of insurance services.