The Preference for Micro Insurance Products by Households in the Informal Economy of Ghana."

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Over the past few decades, governments and donor bodies became more focused in alleviating poverty through major policy reforms such as the structural adjustment programmeas well as the economic recovery programe. The world bank and the international monetary fund therefore initiated numerous poverty reduction strategy (PRS) programmes through many governments in developing countries. In recent times, the government of ghana has intensified its crusade on poverty alleviation by granting microcredits through various microfinance institutions in the country to many micro entrepreneurs operating in the informal economy. the main objectives of this study was therefore to investigate the main types of risks facing sampled households operating in the informal economy of ghana and identify various coping strategies used in managing their vulnerability to risk and an appraisal of the preference for micro insurance as the best alternative coping candidate. The study used data from the data base of enterprise life assurance company in Accra for its analysis. Descriptive statistics and probit regression procedures were used in this study. the study reveals that households faced a lot of risks among which the major ones are health, death and business risks. It was observed that vast majority of households essentially used informal insurance as risk management options. the regression results showed an inverse relationship between informal insurance and sampled households preference for microinsurance. This means that the more households are keen on using informal insurance the less their preference for micro insurance services. Additionally, the coefficients of health and property risks were positively related to sampled households preference for microinsurance, meaning that, given households frequent exposure to these risks, the need for microinsurance must increase. this study invokes a major challenge on the government of ghana to ensure a smooth delivery of the national health insurance scheme to households and advises the national insurance commission to encourage insurance companies to intensify their awareness programmes on the benefits of their various micro insurance products as the major way forward in risk management.



Ghana, households in the informal Economy, preference for micro insurance products