Table of Contents
ABSTRACT.. 2
CHAPTER ONE.. 5
INTRODUCTION.. 5
1.1 Background to the Study.. 5
1.2 Statement of the Problem... 7
1.3 Objectives of the Study.. 8
1.4 Research Questions. 8
1.5 Research Hypothesis. 9
1.6 Significance of the Study.. 9
1.7 Scope of the Study.. 10
1.8 Limitations of the Study.. 10
1.9 Organization of the Study.. 10
REFERENCES.. 11
CHAPTER TWO.. 13
REVIEW OF RELATED LITERATURE.. 13
2.1 Introduction.. 13
2.2 Theoretical Review.. 13
2.3 Conceptual Review.. 15
2.4 Empirical Review.. 18
2.5 Summary of Literature Review.. 20
CHAPTER THREE.. 21
RESEARCH METHODOLOGY.. 21
INTRODUCTION.. 21
AREA OF THE STUDY.. 21
POPULATION OF THE STUDY.. 21
SAMPLING TECHNIQUES.. 22
DATA COLLECTION METHODS.. 23
DATA ANALYSIS PROCEDURES.. 24
Conclusion.. 24
CHAPTER FOUR.. 25
DATA ANALYSIS AND INTERPRETATION.. 25
4.1 Preamble.. 25
4.2 Socio-Demographic Characteristics of Respondents. 25
TABLES BASED ON RESEARCH QUESTIONS.. 29
4.3 Analysis of the Respondents’ Views on Research Question one:. 29
4.4 Testing Hypothesis. 36
4.5 Discussion of Findings. 37
CHAPTER FIVE.. 40
SUMMARY CONCLUSION AND RECOMMENDATION.. 40
5.1 SUMMARY.. 40
5.2 CONCLUSION.. 40
5.3 RECOMMENDATION.. 41
REFERENCES.. 42
APPENDIX.. 44
Research Questionnaire: The Impact of Insurance on Financial Inclusion in Nigeria 44
CHAPTER ONE
INTRODUCTION
1.1 Background to the Study
1.1 Background to the Study
Financial inclusion is a crucial aspect of economic development, and in the Nigerian context, insurance plays a pivotal role in shaping the landscape of financial inclusion. Nigeria, being the most populous country in Africa, has witnessed significant strides in its financial sector over the years. However, a large portion of the population still remains excluded from formal financial services. The impact of insurance on financial inclusion in Nigeria is a multifaceted subject that encompasses accessibility, affordability, and awareness of insurance products among the diverse demographic segments of the country.
One of the key aspects of financial inclusion is providing access to risk mitigation tools, and insurance serves as a potent instrument in this regard. The Nigerian insurance industry has undergone notable transformations in recent years, with regulatory reforms aimed at expanding its reach to underserved populations. This includes initiatives such as microinsurance products tailored to the specific needs of low-income individuals and communities. As a result, the impact of insurance on financial inclusion goes beyond traditional banking services, addressing the vulnerabilities and uncertainties faced by a significant portion of the population. Beck, T., & Cull, R. (2014).
Furthermore, the role of insurance in enhancing financial literacy and awareness cannot be overstated. Educating the Nigerian populace about the benefits and intricacies of insurance fosters a culture of financial responsibility and resilience. This is particularly relevant in a country where a substantial number of individuals have limited exposure to formal financial education. Through targeted awareness campaigns and community engagement, insurance providers contribute to building a financially literate society that can make informed decisions about risk management and financial planning. Nnadi, M. I. (2019).
In examining the impact of insurance on financial inclusion in Nigeria, it is essential to consider the regulatory framework and policy environment that shapes the industry. The Nigerian government has recognized the importance of financial inclusion as a catalyst for economic growth and poverty reduction. Various policies and initiatives have been introduced to create an enabling environment for the expansion of insurance services. Understanding the interplay between regulatory measures, market dynamics, and the preferences of the diverse Nigerian population provides valuable insights into the ongoing efforts to bridge the financial inclusion gap through insurance. In this context, the study of the impact of insurance on financial inclusion in Nigeria is not only an exploration of economic trends but also an examination of the broader social and policy dimensions that shape the financial landscape of the nation. World Bank. (2021).
1.2 Statement of the Problem
The impact of insurance on financial inclusion in Nigeria represents a critical concern in the country's economic landscape. While strides have been made to enhance financial inclusion, a significant portion of the population still remains excluded from formal financial services, hindering economic growth and development. The role of insurance in this context becomes paramount, as it has the potential to mitigate risks for individuals and businesses, fostering a more inclusive financial environment. However, various challenges such as low awareness, affordability issues, and a lack of tailored insurance products have impeded the widespread adoption of insurance services, particularly in rural and underserved areas. Understanding the barriers to incorporating insurance into the financial landscape is essential for policymakers, financial institutions, and the insurance industry to devise targeted strategies that promote accessibility and affordability, ultimately contributing to the broader goal of financial inclusion in Nigeria.
Moreover, the absence of adequate insurance coverage exacerbates the vulnerability of individuals and businesses to unforeseen events, perpetuating a cycle of poverty and economic instability. Without appropriate risk mitigation through insurance, people may be reluctant to engage in economic activities or invest in ventures that could uplift their financial status. This not only hampers individual progress but also has cascading effects on the national economy. Consequently, exploring the multifaceted challenges that hinder the integration of insurance into the financial fabric of Nigeria is imperative for devising comprehensive and effective policies. Addressing these challenges can empower individuals, especially in marginalized communities, to participate more actively in the formal financial system, fostering economic resilience and stability for the nation as a whole.
1.3 Objectives of the Study
The main objective of the study is to examine the impact of insurance on financial inclusion in Nigeria. Specific objectives of the study are:
- 1. Assess the current landscape of insurance penetration and financial inclusion in Nigeria.
- 2. Analyze the specific types of insurance products and their contribution to financial inclusion.
- Evaluate the role of stakeholders and policies in promoting insurance-driven financial inclusion.
1.4 Research Questions
To guide the study and achieve the objectives of the study, the following research questions were formulated:
- What is the current level of insurance penetration (percentage of the population with insurance) in Nigeria, disaggregated by income level, location, and demographic factors?
- How do different insurance products (micro-insurance, life insurance, health insurance, etc.) vary in their impact on financial inclusion in Nigeria?
- How do the regulatory frameworks and initiatives implemented by the Nigerian government and industry regulators impact insurance penetration and financial inclusion?
1.5 Research Hypothesis
The following research hypothesis was developed and tested for the study:
Ho: There is no statistical significant relationship between Insurance and Financial inclusion in Nigeria.
1.6 Significance of the Study
The study is important for many reasons. The following are the major stakeholders this paper through its practical and theoretical implications and findings will be of great significance:
Firstly, the paper will benefit major stakeholders and policy makers in the Insurance sector. The various analysis, findings and discussions outlined in this paper will serve as a guide in enabling major positive changes in the industry and sub-sectors.
Secondly, the paper is also beneficial to the organizations used for the research. Since first hand data was gotten and analysed from the organization, they stand a chance to benefit directly from the findings of the study in respect to their various organizations. These findings will fast track growth and enable productivity in the organisations used as a case study.
Finally, the paper will serve as a guide to other researchers willing to research further into the subject matter. Through the conclusions, limitations and gaps identified in the subject matter, other student and independent researchers can have a well laid foundation to conduct further studies.
1.7 Scope of the Study
The study is delimited to Leadway Assurance, Lagos. Findings and recommendations from the study reflects the views and opinions of respondents sampled in the area. It may not reflect the entire picture in the population.
1.8 Limitations of the Study
The major limitations of the research study are time, financial constraints and delays from respondents. The researcher had difficulties combining lectures with field work. Financial constraints in form of getting adequate funds and sponsors to print questionnaires, hold Focus group discussions and logistics was recorded. Finally, respondents were a bit reluctant in filling questionnaires and submitting them on time. This delayed the project work a bit.
1.9 Organization of the Study
The study is made up of five (5) Chapters. Chapter one of the study gives a general introduction to the subject matter, background to the problem as well as a detailed problem statement of the research. This chapter also sets the objectives of the paper in motion detailing out the significance and scope of the paper.
Chapter Two of the paper entails the review of related literature with regards to corporate governance and integrated reporting. This chapter outlines the conceptual reviews, theoretical reviews and empirical reviews of the study.
Chapter Three centers on the methodologies applied in the study. A more detailed explanation of the research design, population of the study, sample size and technique, data collection method and analysis is discussed in this chapter.
Chapter Four highlights data analysis and interpretation giving the readers a thorough room for the discussion of the practical and theoretical implications of data analyzed in the study.
Chapter Five outlines the findings, conclusions and recommendations of the study. Based on objectives set out, the researcher concludes the paper by answering all research questions set out in the study.
