Analysis of the Contribution of Insurance Companies to the Growth of Small and Medium Enterprises (SMEs): A Case of Statewide Insurance Company (SWICO)
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The purpose of this study was to establish the relationship between the contributions of insurance companies and the growth of SMEs in SWICO based 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; and to investigate the factors inhibiting the purchase of insurance cover by SME operators. The research was descriptive in nature involving quantitative methods which were administered through questionnaires. The total sample of 67 respondents comprised of all the managers and employees of Statewide Insurance Company. Simple random sampling was used whereby the researcher went to SWICO and administered questionnaires to the sampled or selected employees. Primary data was obtained from the library materials, textbooks, SWICO 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 using Spearman Correlation Coefficient. It was concluded that improvement in business skills increases the performance of SMEs. However, insurance companies do not lower 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 SWICO need to build a great relationship with SMEs as their customers in order to develop and grow trust in them and also lower the premium rates to SMEs in order to improve on their performance. Also SWICO needs to have a fresh look at the scope and spectrum of services provided to SMEs and get a better understanding of the scale the enterprise sector.