International Journal of Science and Research (IJSR)

International Journal of Science and Research (IJSR)
Since Year 2012 | Open Access | Double Blind Reviewed

ISSN: 2319-7064




Downloads: 129

Research Paper | Management | Kenya | Volume 6 Issue 1, January 2017


The Role of Risk Management on Financial Performance of Small and Medium Enterprises in Kenya

Archangel Wambazu Madembu | G. Namusonge | Sakwa [6]


Abstract: It is necessary for every small business to manage its risks in order to minimize the loss exposure. SMEs in their operations encounter many risks such as political, natural disaster, credit and operation risks. Poor performance of SMEs is becoming a concern as many of them die immaturely. Therefore this study aimed to investigate the role of risk management on financial performance of small and medium enterprises in Kenya. The study was guided by the following objectives, to examine the role of entreprise risk management on the financial performance of SMEs, to analyse the role of strategic risk management on the financial performance of SMEs, to evaluate the effect of financail risk management on financial performance of SMEs and to establish the role of operational risk management on the financial performance of SMEs. The study is based on the protective motivation theory, risk compensation/risk homeostasis theory and situated rational theory. Empirical review shows that do not embrace risk management seriously due to lack of knowledge and skills. SMEs should focus on implementing comprehensive risk management systems in their businesses. The study adopted a desk research design. The target population was 100 SMEs that were selected for best practices as at 31st December, 2015. The study used secondary data mainly from financial statements of the Companies and other company documents like business plans and strategic plans. It was concluded that risk management practices affect the financial performance of SMEs and was recommended that SME s should adopt appropriate risk management approaches to manage risks in their organisations.


Keywords: Risk management, Proactive management, Spiral inflation, Response costs, Venture capital


Edition: Volume 6 Issue 1, January 2017,


Pages: 2125 - 2130


How to Cite this Article?

Archangel Wambazu Madembu, G. Namusonge, Sakwa, "The Role of Risk Management on Financial Performance of Small and Medium Enterprises in Kenya", International Journal of Science and Research (IJSR), Volume 6 Issue 1, January 2017, pp. 2125-2130, https://www.ijsr.net/get_abstract.php?paper_id=ART20164543

How to Share this Article?

Enter Your Email Address




Similar Articles with Keyword 'Risk management'

Downloads: 156 | Weekly Hits: ⮙1 | Monthly Hits: ⮙2

Research Paper, Management, Sierra Leone, Volume 9 Issue 2, February 2020

Pages: 973 - 978

The Essence of Risk Identification in Project Risk Management: An Overview

Crispin George [7]

Share this Article

Downloads: 2

Research Paper, Management, Morocco, Volume 10 Issue 8, August 2021

Pages: 54 - 61

Operational Risk Management: Practical Case of Insurance Intermediaries

Ait SOUDANE Jalila [3] | Essaidy Mohammed | KATFI Otmane

Share this Article


Top