ABSTRACT
The purpose of this study was to establish the relationship between the
contributions of insurance companies and the growth of SMEs in NICON
basing 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; to investigate the factors inhibiting
the purchase of insurance cover by SME operators and to determine the
strength of the relationship between insurance companies and growth of
SMEs. The research was descriptive in nature involving quantitative
methods which was administered through questionnaires. The total sample
comprised of 65 respondents of all the managers and employees of
National Insurance Corporation. Simple random sampling was used whereby
the researcher went to NICON and administered questionnaire to the
sampled or selected employees. Primary data was obtained from the
library materials, textbooks, NICON 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 at Spearman Correlation Coefficient.
It was concluded that improvement in business skills increases the
performance of SMEs. However insurance companies do not lowers
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 NICON need to build a great relationship
with SMEs as their customers in orders to develop and grow them in
trust and also lower the premium rates to SMEs in order to improve on
their performance. Also NICON need to have a fresh look at the scope
and spectrum of services provided to SMEs and has a better
understanding on the scale of enterprise sector.