ABSTRACT
SMEs are noted as the foundation of the
emerging private sector in developing countries and government’s assistance is
paramount to sustain in contribution to the country’s economy enhance (World
performance of SMEs, little or no attention is given to the sector to become
business recovery conscious in moments when
disaster strikes. Events such as violent floods, fire outbreaks, traffic
accidents, occupational hazards, accidental damage to properties and harm
caused to lives, theft and armed robbery, as well as other unforeseen events
have slowed down private sector investment activities, and in some instance
discontinued the existence of businesses. The need to possess appropriate
insurance policy cover is significant and beneficial to both public and private
stake holders; and more importantly to the survival and success of the Small
and Medium Enterprises (SMEs) sector. The survey involved the collection of
data using questionnaire and observation as a complement. In all 184
questionnaires were administered. The data gathered were primary in nature and
then analysed using frequency counts, cross tabulation, graphs and percentages.
The basic motive of this research was to establish whether SMEs within the
UyoArea use non-life insurance as a risk management tool. The results have
shown that most of the SMEs do not have insurance policies for their
businesses, and the level of information on insurance is relatively low. Owners
of SMEs are required to be educated on the need to have insurance and appropriate
insurance to recover business losses associated with their operations through
periodic workshops organised by industry players. The need to enforce the
Insurance Act on fire and liability insurance to ensure compliance is paramount
to enhancing business recovery mechanism for the sector.
TABLE
OF CONTENTS
DEDICATION................................................................................................................................. iii
ABSTRACT..................................................................................................................................... iv
TABLE OF CONTENTS.................................................................................................................. v
LIST OF TABLES......................................................................................................................... viii
LIST OF FIGURES......................................................................................................................... ix
ACKNOWLEDGEMENTS............................................................................................................... x
CHAPTER ONE.............................................................................................................................. 1
INTRODUCTION............................................................................................................................ 1
1.1 Background to the Study...................................................................................................... 1
1.2 Problem Statement................................................................................................................ 3
1.3 Objectives of the Study........................................................................................................ 4
1.4 Research Questions.............................................................................................................. 5
1.5 Significance/Justification of the Study................................................................................. 5
1.6 Method of the study............................................................................................................. 6
1.7 Scope and Limitation of the Study........................................................................................ 7
1.8 Organisation of the Research................................................................................................ 8
CHAPTER TWO........................................................................................................................... 10
LITERATURE REVIEW............................................................................................................... 10
2.1 Defining the Small Business; Overview and Key
Definitions............................................. 10
2.2 History of Medium Scale Enterprises (SMEs) in Ghana..................................................... 12
2.3 Characteristics of SMEs for the Research........................................................................... 13
2.4 The Nigeriaian Situation..................................................................................................... 14
2.4.1 Working Definition......................................................................................................... 17
2.5 Strategic Role of SMEs....................................................................................................... 17
2.6 Challenges of SMEs............................................................................................................ 18
2.7 The Concept of Risk........................................................................................................... 19
2.7.1 Types of Risks................................................................................................................ 20
2.7.1.1 Speculative or Dynamic Risk.......................................................................................... 20
2.7.1.2
Pure or Static Risk........................................................................................................... 21
2.7.1.2.1 Why some Risks (speculative risks) are not insurable................................................. 21
2.8 Risk Management.............................................................................................................. 22
2.8.1 Managing risk................................................................................................................. 23
2.9 Insurance as a Risk Management Tool............................................................................... 24
2.10 SMEs Insurance, the Perspectives...................................................................................... 25
CHAPTER THREE........................................................................................................................ 29
METHODOLOGY.......................................................................................................................... 29
3.1 Overview............................................................................................................................ 29
3.2 Research Design and Data Collection Instrument.............................................................. 29
3.2.1 Questionnaire.................................................................................................................. 30
3.2.2 Pre-testing of the Research Instrument........................................................................... 30
3.3 Population and Sample Size................................................................................................ 30
3.4 Sampling Technique.......................................................................................................... 33
3.5 Data Preparation for Analysis............................................................................................ 33
3.6 Data Analysis..................................................................................................................... 34
3.7 Limitations.......................................................................................................................... 34
CHAPTER FOUR.......................................................................................................................... 35
PRESENTATION AND ANALYSIS OF DATA............................................................................ 35
4.1 Introduction......................................................................................................................... 35
4.2 Types of Business, Ownership and their Size..................................................................... 35
4.2.2 Classification of Business............................................................................................... 36
4.2.3 Type and Locations of Business in Uyo Metropolis........................................................ 37
4.2.5 Registration of Businesses............................................................................................... 38
4.3 Analysis of Risk Management............................................................................................ 39
4.4 Management of Business Risks by Entrepreneurs of SMEs................................................ 40
4.5 Benefits of Insurance......................................................................................................... 44
4.6 Information on Insurance.................................................................................................. 45
4.6.1 Awareness of Compulsory Insurance............................................................................. 46
4.7 Challenges of Businesses Using Insurance........................................................................ 47
4.8 Suggested Solutions to Challenges to Using Insurance........................................................ 48
CHAPTER FIVE............................................................................................................................ 49
FINDINGS, CONCLUSIONS AND RECOMMENDATIONS........................................................ 49
5.1 Introduction......................................................................................................................... 49
5.2 Summary of Findings......................................................................................................... 49
5.3 Conclusions......................................................................................................................... 50
5.4 Suggestions/Recommendations............................................................................................ 51
REFERENCES................................................................................................................................ 53
APPENDICES................................................................................................................................ 59
Appendix 1................................................................................................................................... 59
Section A: Business Information................................................................................................... 59
Section B: Profile of Business
Activities and Risk Management.................................................... 59
Section C: Views of SMEs Insurance
by Insurance Providers....................................................... 59
Particulars of respondent............................................................................................................... 59
Appendix 2................................................................................................................................... 60
Questionnaire on Research Topic:................................................................................................. 60