Socio-Economic Factors and the Performance of Islamic Micro-Insurance Companies in Kenya
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Date
2023-11
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International Academic Journal of Economics and Finance
Abstract
Performance of Islamic micro insurance
companies play an important part in the
economic development of the insurance
sector and the economy at large by providing
insurance services to benefit the low-income
part of a given society. However, all these
benefits may encounter challenges as a result
of social economic factors among other
factors. It is on this basis that the current
research examined the impact of socioeconomic factors on performance of Islamic
micro insurance in Kenya. The precise
objective of the study was: to ascertain the
effects of income level on the performance of
Islamic micro insurance in Kenya. The study
was anchored using Agency theory, expected
utility theory and fundamental cause theory.
This study used descriptive survey design.
The targeted respondents were 105
respondents comprising of 5 managers and
100 Takaful agents. The study utilized census.
The study revealed that income level had a
positive and significant effect on the
performance of Islamic micro insurance in
Kenya. The study concluded that low-income
individuals have little access to formal
financial services for the management of
risks. This research advised Islamic micro
insurance operators to offer training to their
workers in order to strengthen their human
capital base and advance the Takaful agenda
in the insurance industry. There is a need for
public education on the Islamic microinsurance options that are now available and
how they might help reduce risk. The results
of this research were useful for Kenyan
insurance firms and policy makers as they
enabled them to comprehend and recognize
the advantages of micro insurance and how to
overcome obstacles caused by socioeconomic
variables that impact their performance.
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Citation
Mohamed, A. O., Ndede, F. W. S. (2023). Socio-economic factors and the performance of Islamic micro-insurance companies in Kenya. International Academic Journal of Economics and Finance, 4(1), 133-147