Exploring the Role of Microinsurance in Financial Inclusion: a Tanzanian Case Study

The study addresses a significant gap in the literature by investigating the relationship between microinsurance and financial inclusion in Tanzania, mainly focusing on the role of digital financial services. Although some literature and knowledge exist that explain microinsurance and financial inclusion, what remains unexplained in terms of contribution to knowledge is the specific nuances or mechanisms through which digital financial services facilitate access to microinsurance and how microinsurance contributes to financial inclusion. This research bridges this gap to some extent. While other studies mention that digital financial services have opened doors for low-income individuals to access microinsurance and that microinsurance has promoted financial inclusion by offering affordable products, they do not delve into the specific mechanisms or strategies employed to achieve these outcomes. To bridge the gap, the research gathered data through in-depth unstructured interviews, and thematic analysis was employed for data analysis. The study’s findings suggest that digital financial services play a significant role in shaping microinsurance opportunities in Tanzania, mainly by providing access to low-income and financially excluded individuals. These findings underscore the positive impact of microinsurance services on financial inclusion, emphasizing the importance of accessible and affordable financial services for marginalized individuals. Moreover, the principle of risk mutualization has been used to provide the theoretical underpinning of the study, and it extends beyond financial transactions to include building awareness and understanding of microinsurance and risk management.