Readiness assessment of Islamic micro‐finance institution to implement micro‐insurance concept (case of Iran)

Abstract

Purpose

The purpose of this paper is to assess readiness of Iranian micro‐finance institutes (MFIs) to perform micro‐insurance activities.

Design/methodology/approach

A five‐variable model was used. Each variable was assessed using a special dimension of readiness. Row data were gathered through a closed interview containing 34 questions using the Likert scale. Interviewees included 30 experts working as top managers in 15 selected Iranian MFIs (consisting of banks, finance and credit institutes and Qarzol‐hasane).

Findings

The score for general readiness of MFIs in Iran revealed a remarkable figure. Accordingly, it is suggested that these institutes should enter this business field incrementally and invest in this particular domain.

Research limitations/implications

The sample was not truly random, as the professionals in this field are not easily accessible. The factors that were used for the study were based on a review of past researches and the factors were chosen after deliberation and reliability tests. However, this study may not have chosen all possible factors. The research findings are limited to MFIs of Iran. The findings cannot be generalized to other institutions or industries.

Originality/value

The paper reveals the importance of the readiness assessment in successful microinsurance implementation by Islamic MFIs and introduces a basic model for this type of readiness assessment that can be used in other countries.

Citation

Saleh Torkestani, M. and Ahadi, P. (2008), "Readiness assessment of Islamic micro‐finance institution to implement micro‐insurance concept (case of Iran)", International Journal of Islamic and Middle Eastern Finance and Management, Vol. 1 No. 3, pp. 249-261. https://doi.org/10.1108/17538390810901177