The IUP Journal of Applied Finance
Urban Unorganized Sector Enterprises' Access to Insurance Services in Assam

Article Details
Pub. Date : Jan, 2022
Product Name : The IUP Journal of Applied Finance
Product Type : Article
Product Code : IJAF40122
Author Name : Prasenjit Bujar Baruah
Availability : YES
Subject/Domain : Finance
Download Format : PDF Format
No. of Pages : 11



A majority of the unorganized sector enterprises are meant for sustaining the livelihood of the entrepreneurs' households. So, any problem in such business activity may adversely affect the income of such households. The insurance coverage of these enterprises may reduce such risks. Motivated by this point, this paper, based on primary data collected from a customized sample survey, tries to examine the urban unorganized enterprises' access to insurance services in Assam. A majority of the sample entrepreneurs have access to life insurance services. However, access to business insurance is not satisfactory. A logit model is estimated for the determinants of urban unorganized enterprises' access to business insurance. The results show that turnover, registration, and value of fixed assets and equipment of the enterprise, and level of education of the entrepreneurs have a positive impact on its business insurance coverage.


It is well established that the unorganized sector is an integral part of the developing and underdeveloped economies. This sector employs a larger section of the workforce of these countries. The contribution of this sector to the gross domestic product (GDP) of those countries is also not small, although less than proportionate to its share in employment. In India, the unorganized sector has employed more than 92% of its workforce and its contribution to GDP is around 50% (NCEUS, 2007). Very often, the lack of alternative wage employment forces many, specially the poor, to seek self-employment by setting up their own business (Sethuraman, 1992). Thus, such enterprises are meant for the livelihood of the entrepreneurs' households and any business problem may push them into extreme poverty. Moreover, the enterprises in this sector have been facing various problems, such as small and fluctuating level of income, lack of skills, use of poor technology and non-accessibility to capital. Thus, the enterprises are one of the vulnerable sections in those economies, and are required to be covered by different social security measures like old-age pensions, subsidized credit, different skill formation programs, etc. One of such social security measures is the business insurance coverage. It has motivated this researcher to investigate into unorganized entrepreneurs' access to insurance services. There are some studies on the general insurance and health insurance coverage of the unorganized sector workers and entrepreneurs (Visaria and Gumber, 1994; Gumber and Veena, 2003; and Naagarajan, 2010). But to the best knowledge of this researcher, no study has been carried out regarding the business insurance coverage of the unorganized enterprises in Assam. This study was conducted in Assam, because it is one