Determinants of Micro-insurance Adoption in Low-Income MarketsDeterminants of Micro-insurance Adoption in Low-Income Markets
Abstract
This study explores the determinants of micro-insurance adoption among low-income populations in Nigeria, focusing on six key factors: Affordability, Product Simplicity, Perceived Benefits, Accessibility, Local Economic Conditions, and Trust in Provider. Grounded in Everett Rogers’ Diffusion of Innovations Theory, the research adopts a quantitative, cross-sectional survey design, with data collected through structured questionnaires. The sample includes 500 low-income individuals from both urban and rural areas across Nigeria, employing multi-stage sampling to ensure broad representation.Findings reveal that each factor significantly influences adoption intention. Affordability (β = 0.285, p < 0.001) and Perceived Benefits (β = 0.312, p < 0.001) emerge as the most influential determinants, suggesting that financial accessibility and perceived value are primary drivers. Product Simplicity (β = 0.234, p < 0.001) and Accessibility (β = 0.245, p < 0.001) also show significant positive effects, indicating that ease of understanding and accessibility are essential for this demographic. Local Economic Conditions (β = 0.198, p < 0.001) and Trust in Provider (β = 0.276, p < 0.001) further impact adoption intention, emphasizing the importance of economic stability and provider reliability in enhancing micro-insurance uptake. The model explains approximately 58.7% of the variance in adoption intention (R² = 0.587), with fit indices confirming a satisfactory model fit (CFI = 0.932, RMSEA = 0.054).These results highlight the need for tailored, accessible micro-insurance products that align with the financial constraints and risk profiles of low-income populations, underscoring affordability, simplicity, and trust as core components. The findings contribute to the development of more inclusive financial services and offer policy recommendations to increase micro-insurance adoption in developing regions.
