Factors Determining Micro, Small And Medium-Sized Enterprises’ (MSMEs) General Takaful Adoption In Nigeria: The Moderating Role Of Religiosity
Risk management allows businesses to prepare for the unexpected by minimizing risks and unexpected losses in the future. The ability to manage risk is particularly important to Micro, Small and Medium-sized Enterprises (MSMEs) which constitute more than 95% of all businesses in Nigeria. One of the m...
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| Summary: | Risk management allows businesses to prepare for the unexpected by minimizing risks and unexpected losses in the future. The ability to manage risk is particularly important to Micro, Small and Medium-sized Enterprises (MSMEs) which constitute more than 95% of all businesses in Nigeria. One of the mitigating techniques in minimizing risk is through insurance and Nigeria being a Muslim-majority country, takaful should be a better alternative than conventional insurance. However, despite their fragile nature and their exposure to various threats, MSMEs are the least segment utilizing insurance cover. Recent reports show that most of these businesses do not participate in any insurance scheme. Furthermore, there are fewer studies that examined takaful adoption by MSMEs, especially in Nigeria. These past studies also are inconclusive on the significant factors influencing adoption, especially from the behavioural perspective. Therefore, this study fills the existing gap by conducting an empirical study that investigates the noneconomic factors influencing the adoption of general takaful among MSMEs owner-managers in North-West Nigeria (Kano and Kaduna). Besides, the study examines the moderating role of religiosity on the relationship between the predictor variables in the study (relative advantage, compatibility, complexity, uncertainty, awareness, social influence, government support, and prior loss experience) and general takaful adoption. A quantitative survey study of 295 randomly selected MSMEs in Kano and Kaduna was undertaken. Partial least Square Structural Equation Modelling (PLS-SEM) technique was applied to test the hypotheses advanced. The findings showed that relative advantage, compatibility, awareness, social influence, religiosity and prior loss experience have a direct and significant influence on MSMEs owner-managers’ behavioural intention to adopt general takaful. Conversely, the study found that complexity, uncertainty and government support were not significant in explaining general takaful adoption. Furthermore, as hypothesized, religiosity moderates the influence of relative advantage, complexity, government support, and prior loss experience on general takaful adoption. However, the hypothesized moderating effect of religiosity on compatibility, uncertainty, awareness, and social influence were not supported in this study. The study findings contribute to the scant literature on general takaful adoption. Moreover, the findings underscore the significance of religiosity in influencing takaful adoption. Furthermore, the findings provide significant practical implications and insights to takaful operators, takaful regulators, and policymakers in Nigeria in terms of devising appropriate strategies that will increase the adoption rate of general takaful scheme among MSMEs |
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