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MODEL-BASED MEASURE OF DEMAND FOR MICRO-INSURANCE BY HOUSEHOLDS AND SMALL ENTERPRISES IN GHANA
Keywords:
micro-insurance, Ghana, insurance in Ghana, probit model.DOI:
https://doi.org/10.17654/0972361722086Abstract
While overall insurance penetration in sub-Saharan Africa and Ghana in particular is getting better, there has been a low micro-insurance penetration over the years, perhaps due to a large informal and uninformed sector. This study seeks to shed some light on the factors that influence households, and small businesses’ decisions to demand micro-insurance products. We also highlight some challenges and benefits subscribers encounter or derive from patronizing micro-insurance. Using a survey data collected from 200 households from the informal sector in Ghana, a probit model analysis showed that, only about 33% of the households have subscribed to any micro-insurance policy and about 67% of the self-employed have not subscribed to any micro-insurance products. Out of this 67%, only 69% are not willing to pay for micro-insurance while 31% are willing to pay. The study found that age, marital status, education, trust, income and risk experience are some of the key factors that influence the demand for micro-insurance in Ghana.
Received: February 15, 2022
Revised: April 20, 2022
Accepted: April 27, 2022
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