An assessment of the factors affecting the uptake of micro insurance in Uganda: A case study of Wandegeya Market
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The objective of this study was to assess the factors affecting the uptake of micro insurance in Uganda. These factors included socio-economic and demographic factors such as gender, education level, size of household, level of income, awareness on insurance, trust in the insurer and age of the respondents. Primary data was collected from 120 individuals aged 18 years and above in Wandegeya market in Kampala district, Uganda. The analysis was done using frequency distribution and logistic regression in STATA. From the results of analysis, majority of the respondents had never used micro insurance (90%) and only 8.3% had an idea about micro insurance. 40% of the respondents considered issues of trust in the insurer as a major reason for not engaging in micro insurance activities. Other risk mitigation approaches such as borrowing from banks and friends were also relevant in the uptake of micro insurance. In the multivariate analysis, uptake of micro insurance was directly influenced by income level (p-value=0.022), household size (p-value=0.022and knowledge about micro insurance (p-value=0.016) and suitability of micro insurance products for the customers (p-value=0.0002). Male individuals were found to be less likely to purchase micro insurance (Odds Ratio=0.9625). Highly educated individuals were more likely to purchase micro insurance (Odds Ratio=1.66). Similarly, widowed (Odds Ratio=1.25) and separated individuals (Odds Ratio=1.3636) were more likely to take on micro insurance as compared to married ones. Older individuals were more likely to purchase micro insurance, odds ratio=1.75. Individuals with higher incomes (Odds Ratio=7.28), larger households (Odds Ratio=3.348) as compared to smaller households. Such findings of the research show that there is need to increase public awareness of micro insurance so that there is an increase in uptake of micro insurance. the products of micro insurance need to be designed to fit the needs of the low income earners. The government needs to come up and subsidize the insurance providers so that there is adequate extension of micro insurance services to the low income individuals.