I NEED DIGITAL INDIA PROJECT REPORT

1. S U B M I T T E D T O : S U B M I T T E D B Y :
R A J W I N D E R K A U R N A V J O T K A U R
R O L L N O . 2 0 2 0 0 4 1
M . C O M 4 T H S E M .
PRESENTATION
ON
ANALYSIS OF THE ROLE OF INSURANCE
COMPANIES IN DRIVING GROWTH OF SME

2. INTRODUCTION
 The substantial growth of small and medium enterprises
(SMEs) activity clearly marks SME as one of the most
remarkable economicphenomena. SME is a business
that is privately owned and operated with a small
number of employees and relatively moderate volume
ofsales. The definition of SMEs varies from country to
country depending on the level of development and the
strength of the economy. Thelower limit for small scale
enterprises is set at between five and ten workers and
the upper limit is set at between fifty and one
hundredworkers.

3. OBJECTIVE
 Insurance companies can prevent them from being shut down.
SMEs are small and medium scale enterprises with about 5 to
10 employees in a small SME and a maximum of 50 to 100
employees in a medium-scale enterprise. SMEs are vital for
the growth of the economy as they are independent and can
generate effective revenue, contributing to the country’s GDP.
It is recommended that these SMEs must get business
insurance. However, with the lack of awareness of insurance
of businesses, most small to medium enterprises fail to
function beyond two years.
 The lack of sustenance due to a blend of financial difficulties
and departmental challenges is the cause of the shutdown.

4. PURPOSE OF THE STUDY
 The study established the contribution of insurance
companies and the performance of SMEs in Uganda.
The study focused on Insurance companies in
Uganda- National Insurance Corporation Limited
(NIC) which is an insurance company in Uganda.
The company is a leading provider of insurance and
risk management services with 19 branches spread
throughout the country (Robinson, 2009). NIC was
established by Act of Parliament in 1964.

5. SCOPE
 The study focused on the efforts that are made by
National insurance company to raise the growth of
SMEs. Contribution that insurance companies play
in the growth and development of SMEs and the
relationship between insurance companies and
SMEs was also studied. The study targeted the
employers and employees of NIC. 1.6 Significance of
the study. This research will be undertaken as an
academic requirement by Makerere University
before the degree of Bachelor of Commerce can be
awarded.

6. MEASURING THE GROWTH AND
DEVELOPMENT OF SMES
 To measure the development and growth of SMEs are
used different indicators. Usually are used indicators
such as sales or turnover growth and increase of
employment over a period of time. Also for measuring
the development of SMEs are used additional indicators
such as asset value, market share, profits and output,
though they are not very common compared with sales
and employment indicators. Indicators such as the level
of production and market share vary widely depending
on the industry and as a result it is very difficult to use
them for comparisons, while profit is not relevant unless
measured for a period of time.

7. EXTERNAL FACTORS AFFECTING THE
DEVELOPMENT OF SMES
 Access to finance
The first challenge is the financial constraints. Lack of capital or financial
resources was a major barrier for SMEs and entrepreneurs who usually have to
mobilize their own capital or their own resources to establish or expand their
business (Harvie, 2005).
 Competition
By entering the competition, the company tries to find competitive advantages
that greatly affect the success of the enterprise (Walley, 1998). SMEs are
usually not very competitive in terms of market knowledge, innovation,
prudent investment, business operations and good management, which are
important factors in improving the quality (OSMEP, 2007).
 Government policies
The importance of SMEs to the economy of a country indicates how important it
is to have government policies that support SMEs, including regulations that
enable them to operate efficiently and regulations that reduce their
administrative costs (Harvie and Lee, 2005).

8. STATEMENT OF THE PROBLEM
 Despite the contribution of insurance corporations to the
growth of SMEs in economic development, failure and
slow growth still exists and the public doubts its
management (Ocici, 2007). Research suggest that 80% of
the businesses affected by major incident close down
within 18 month, and 90% of those who lose data close
down within 2 years. This is due to the failure of small
businesses to have adequate insurance cover and proper
business continuity plans (cover sure, 2007).