TAKAFUL INSURANCE COMPANIES’ CLAIM PAYMENT AND GROWTH OF SMEs IN NIGERIA

Abstract

The establishment of a thriving Takaful insurance subsector of the Nigerian insurance go a long way in driving entrepreneurship in the Northern Nigeria especially among the Moslems who might have reservations for the use of conventional insurance for the protection of their risks and those of their business; and also, for them to benefit from other financial intermediation accruing from the insurance industry. The non-purchase of the Takaful insurance products by these SMEs could be as a result of the non-affordability of the premiums to be paid by the SMEs owners, the fear of non-payment of claim after the insured event could have happened. The survey method was adopted in carrying out this research. This entails the use of questionnaire and interviews to triangulate and justify the impact of Takaful insurance on the development of small and medium enterprises in the country. The simple random sampling method was applied. Thus, the 487 respondents would be picked randomly from the owner/managers of SMEs who insure these Takaful insurance companies. With a coefficient of 0.318 and a low standard error (0.036), TCS has a substantial positive impact on business performance. The multiple regression results underscore the positive and significant impacts of Takaful premium affordability, claims settlement, Islamic principles, risk management consultancy support, customer service, and education and awareness initiatives on SMEs' overall performance. These findings emphasize the importance of embracing Takaful principles and services as integral elements for enhancing the financial and operational aspects of SMEs.