The Impact of Risk Management Practices and the Performance of Small and Medium Enterprises; A Case Study Selected SMEs in Mukono District.

Abstract

The main objective of the research is to examine the effect of risk management practices and the performance of Small and Medium Enterprise. The convenience sampling method was used for the study. The used a sample of 22 Small and Medium Enterprises for the analysis. The study used primary data obtained through questionnaire administration which was analyzed using Microsoft Excel 2019 and SPSS. The study was guided by the following research questions: (i) What is the impact of risk identification and the performance of SMEs? (ii) What is the impact of risk mitigation and the performance of SMEs? (iii) What is the impact of risk monitoring and the performance of SMEs? To achieve these objectives, the study was descriptive analysis to analysis to analyze data. The findings reveal that risk management practices are poorly practiced in SMEs because they have little risk management knowledge and there’s inadequate risk management training among employees. The positive relationship between the dependent and independent variable indicated that the more SMEs effectively implement risk management, the more they improve their performance. The study recommends an improvement in training of employees so to equip them with relevant risk management knowledge. The Government of Uganda in partnership with local authorities should take adequate steps to provide risk management support for the SMEs for example offering financial incentives such as subsidies, low-interest loans to help businesses invest in risk management measures like disaster preparedness.