Assessment Of Insurance And Risk Management In Small Scale Business In Nigeria

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Small to Medium Enterprises have become increasingly important to Zimbabwe‟s economic growth.
The decline in employment levels within the formal sector since year 2000 due to closures and retrenchments
attributed to low capacity utilization has resulted in the SMEs sector assuming a greater prominence in
providing a source of livelihood to many .There is, therefore, need to support and nature the growth of SMEs so
as to contribute meaningfully to the national cause.SMEs in Zimbabwe contribute more than 50% of the GDP
and are responsible for the livelihood of 80% of the population. Lack of capital is one of the major constraints
of SMEs in Zimbabwe. The phenomenal growth of the SMEs sector in the past six years provided employment
to millions of people, as the country is passing through a challenging phase. The Reserve Bank of Zimbabwe
has supported SMEs through a number of schemes.
The Credit Guarantee Company was established in 1977 following the realization that small business
persons, in particular the indigenous population, had difficulties in accessing credit from the formal banking
system due to lack of adequate security. The Central Bank together with the four commercial banks in the
country at that time formed the Finance Trust for the Emergent Businessmen (FEBCO), whose aim was to
facilitate the granting of credit to small business entrepreneurs. The commercial banks provided loans at
concessional rates to viable emergent businesses, whilst the Reserve Bank provided guarantees of 50% on the
outstanding amount in the event of default by the borrower.
FEBCO was later transformed to the Credit Guarantee Company (CGC), through an Act of
Parliament, to provide guarantees on business loans advanced by commercial and merchant banks to SMEs with
insufficient or no collateral security. The following facilities were administered through the company: Canadian
International Development Agency (CIDA) Scheme; Small Business Sector Facility (SBSF) Scheme; and
indigenous Business Women Organization (IBWO) Scheme.
The World Bank Enterprise Development Project was launched in 1997, with the objective of
stimulating economic growth by broadening participation in the economy by Small to Medium Enterprises. The
high demand for SME funding necessitated the Reserve Bank to put in place a Small to Medium Enterprises
(SMEs) Revolving Fund following the announcement of the Mid-Term Monetary Policy Statement in July 2006
and their implementation of the facility. Despite the Government commitment to provide the required funding to
SMEs, the ventures do not seem to graduate from one level to the other in terms of growth. The SMEs life cycle
approach given by Kazanjian(1993),presents five stages through which SMEs should pass. These stages,
include,1)conception and development,2)commercialization,3)growth,and4)stability. Studies by Henschel
(2008) have confirmed that SMEs in developing countries have difficulties in graduating from conception and
development to stability. Therefore this study suggests that SMEs be capacitated in risk assessment and
management as a way of building capabilities to grow from one level to the other


Chapter One            Introduction

1.1         Background of the study

1.2         Statement of the problem

1.3         Purpose of the study

1.4         Significance of study

1.5         Research questions

1.6         Scope of study

1.7         Limitation of study

1.8         Definition of terms

Chapter Two

2.0         Literature Review

Chapter Three

3.0         Methodology

Chapter Four

4.0              Data Analysis

Chapter Five 

5.0         Summary, Conclusion and Recommendations

References Questionnaires

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