Risk management focuses on adopting a systematic and consistent approach to manage all of the risks confronting organization. Risks distinctiveness applicable to SMEs in Kenya include: uncertain risk, a chance of loss, normally accidental, sudden and unforeseen. This uniqueness makes entrepreneurs to seriously think about risk, its impact on their businesses and how risk can be managed. It is therefore important to investigate the influence of risk management practices on performance of small micro enterprises. Five specific research objectives guided the study i.e. to identified the Components of risk in small and medium enterprises (SMEs, to examine the various kind of risk connected with SMEs, to identified risk management methods and techniques used to determine and monitor risks within SMEs, to determine the effect of risk management practices on SMEs performance and to identify impediment associated with risk management of SMEs in Eldoret. The descriptive research was employed in the study. The target population comprises of SME operators mainly drawn manufacturing, services and processing within Eldoret CBD. The sample for the study was selected using stratified random and simple random sampling methods. The research instruments were questionnaire, observation and interview. The data was analyzed using descriptive statistics (frequency tables), while correlation and regression analysis were used to test the hypotheses. The finding of the showed that very few SME owners, managers, entrepreneurs or key designated employees make use of risk management tools and techniques within their businesses, to achieve growth and sustainability. However, the majority agreed to the high importance of risk management in the success of a business enterprise. The findings of the study furthered revealed that leverage on financial structure, issue of collateral security, incapacity to go for technological advancement; tough competition and inadequate margin are among the risk associated with SMEs. The findings of the study furthered suggest that the risk management practice has a lot of effect on SMES performance. This study is significant since it is hoped the findings and recommendations of the study will assist the policy makers in the Ministry of Trade and Industry in making appropriate decisions.
Inhaltsverzeichnis (Table of Contents)
- ABSTRACT
- INTRODUCTION
- STATEMENT OF THE PROBLEM
- PURPOSE OF THE STUDY
- KIND OF RISK CONNECTED WITH SMES
- CONCLUSION
- RECOMMENDATIONS
- REFERENCES
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This study aims to investigate the influence of risk management practices on the performance of small micro enterprises (SMEs) in Eldoret Town, Kenya. The research explores the relationship between risk management practices and SME performance, aiming to identify key risk management methods and techniques used by SMEs, the impact of these practices on their performance, and any obstacles they face in implementing effective risk management strategies.
- The role of risk management practices in the success of SMEs
- The types of risks faced by SMEs in Eldoret Town
- The methods and techniques used by SMEs to manage risk
- The relationship between risk management practices and SME performance
- The challenges faced by SMEs in implementing risk management strategies
Zusammenfassung der Kapitel (Chapter Summaries)
- ABSTRACT: The abstract provides an overview of the study's focus, objectives, research methodology, and key findings. It highlights the importance of risk management for SMEs and outlines the research question: How do risk management practices influence the performance of SMEs in Eldoret Town?
- INTRODUCTION: The introduction emphasizes the prevalence of risk in all businesses, particularly SMEs. It defines risk and risk management, highlighting the importance of a structured approach to risk management for SMEs in today's dynamic business environment.
- STATEMENT OF THE PROBLEM: This section outlines the problem addressed by the study. It argues that SME owners and managers often fail to utilize risk management methods effectively, leading to potential threats to their business sustainability. The study aims to address this gap by examining the influence of risk management practices on SME performance.
Schlüsselwörter (Keywords)
The study's focus on the relationship between risk management practices and SME performance in Eldoret Town, Kenya, makes "risk," "management," "performance," and "small micro enterprises" central keywords. It also explores the specific types of risks faced by SMEs, including financial risks, operational risks, and strategic risks, leading to further keywords such as "financial structure," "collateral security," "technological advancement," and "competition." The study's methodology, employing descriptive statistics and correlation and regression analysis, adds "descriptive statistics" and "regression analysis" to the list of key terms.
- Quote paper
- Judith Jebichii Tuwei (Author), Latoya Cheptoo Berege (Author), 2018, Influence of Risk Management Practices on the Performance of Small Micro Enterprises in Eldoret Town, Kenya, Munich, GRIN Verlag, https://www.grin.com/document/439157
