Enterprise Risk Management and the Survival of Small Scale Businesses in Nigeria

Kehinde, A. Obasan; A, Opeyemi; Benjamin, Audit; Adedayo, O.F.; Oa, Abel

doi:10.4172/2472-114x.1000165

Cited by 5 publications

(6 citation statements)

References 12 publications

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“…This indicates that credit increases enterprise capital which helps to achieve economies of scale and undertake the required enterprise tasks. The finding aligns with the significant positive relationship between the financial adequacy and profitability of SMEs (Kehinde et al, 2017).…”

Section: Econometrics Resultssupporting

confidence: 83%

Profitability of Agricultural Micro and Small-Scale Enterprise in North Wollo Zone, Amhara Regional State, Ethiopia

Endris

Kassegn

2023

Sage Open

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The contribution of micro and small enterprises is limited as the majority are financially constrained and half of them exit from business in 2014/15, Amhara Region. Therefore, this study aimed to analyze the profitability of agricultural micro and small-scale enterprises in North Wollo Zone, Amhara Regional State, Ethiopia. Primary data was collected from 271 sample enterprises. The study employed descriptive and econometrics models for the data analysis. The financial ratio result shows that the return on asset, return on owner equity and net profit margin were 0.1601, 0.2768, and 0.1520 birr, respectively. The result of the probit model estimation shows that six variables, namely enterprise age, manager education level, credit use, input availability, owners’ aspiration, and frequency of extension contact significantly and positively influenced the probability of Micro and Small Enterprises (MSEs) being profitable. The second hurdle model, the truncation model showed that enterprise age, manager education level, record keeping, access to input, and frequency of extension contact significantly affected the extent of agricultural MSEs’ profitability. Therefore, enhancing the knowledge, skill, and aspirations of enterprise owners, improving financial access and outreach, providing financial bookkeeping training and practice, creating reliable integration with input producers, and frequent extension support to enhance the profitability and sustainability of enterprises.

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Section: Econometrics Resultssupporting

confidence: 83%

Profitability of Agricultural Micro and Small-Scale Enterprise in North Wollo Zone, Amhara Regional State, Ethiopia

Endris

Kassegn

2023

Sage Open

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“…This finding corroborates the results of a number of related researches in the past. One of such is the findings of Kehinde, et al, (2017) which found that the practice of ERM is positively and significantly related with the survival of SMEs in Nigeria. The results equally support the findings of another study in Nigerian context by Adeyele and Omorokunwa (2017) which reported a direct and positive relationship between effective risk financing and probability of SMEs to survive.…”

Section: Discussion Of Resultsmentioning

confidence: 99%

“…Agrawal (2016) mentioned that SMEs will benefit immensely from a good implementation of ERM programme through transforming risks into opportunities, engaging in favourable competition, creation of value, enhancing safety and achievement of sustainable development. Kehinde, Opeyemi, Benjamin, Adedayo and Abel (2017) found out that there is a significant positive relationship between the practice of ERM and the survival of SMEs in Nigeria. Adeyele and Omorokunwa (2017) found that a direct and positive relatio survival.…”

Section: Review Of Relevant Literaturementioning

confidence: 95%

Enterprise Risk Management Practices and Survival of Small and Medium Scale Enterprises in Nigeria

Ibiwoye

Joseph

Francis

2020

Studies in Business and Economics

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The survival rate of Small and Medium Scale Enterprises (SMEs) have been found to be low despite all the effort made by the government to sustain their existence. This seems to be linked to the poor management of various risk factors confronting the operators of the sector in Nigeria. In view of this, the study is aimed at determining the influence of Enterprise Risk Management (ERM) practices on survival of SMEs in Lagos State. With the application of cross-sectional survey technique, a sample of 400 operators was selected among SMEs across Lagos State. Data which were generated through structured questionnaires were analysed using both descriptive and inferential statistical tools. Results indicate that ERM practices significantly influence the survival of SMEs in Lagos State. Based on the findings, it was recommended that SMEs owners should take ERM practices as a valuable business function that enhances survival. Also, government should continue to sensitise SMEs on the benefits of ERM and put in place mandatory ERM guidelines to compel SMEs to practice it.

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“…Risk Management is a process through which risks can be measured, exploited, governed, financed and monitored from all sources by business organizations operating in any sector of the economy with a view to increasing the value of shareholders or owners. The enterprise risk management views risks as opportunity exemplified in the overall business strategy of an enterprise which must be identified, measured, responded to, prevented and monitored (Kehinde et al, 2017). Conceptually, Risk Management Strategies (RMS) can be categorized based on three components: investment, budgeting and marketing (Figure 1).…”

Section: Conceptual Framework and Estimation Techniquementioning

confidence: 99%

Risk Management Strategies of Micro, Small and Medium Agribusiness Enterprises in North-West, Nigeria

Magaji¹,

Oladimeji²,

Hassan³

et al. 2021

JASD

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The study identifies the common risk management strategies (RMS) used by micro, small and medium scale enterprises (MSMAEs) in North-west, Nigeria. A sample of 334 MSMAEs were selected using multi-stage sampling procedure. Data were collected in 2020 with the use of structured questionnaire. Both descriptive statistics and principal component analysis (PCA) were employed to describe and analyse risk management strategies of MSMAEs. The result revealed that there were three categories of RMS namely, investment, budgeting and marketing. The investment RMS were the most used strategies with a mean score ( of 3.73 and a standard deviation ( of 2.85. This is followed by the marketing RMS with a mean score of 2.98 and a standard deviation of 2.08, irrespective of the business status. The least important RMS were the budgeting RMS with a mean score of 1.91 and a standard deviation of 1.52. The PCA results also revealed that RMS factor under micro agribusinesses had the highest and smallest correlation in terms of maintaining accurate and up-to-date financial record (0.93) and savings (0.66), respectively. Similarly, under the small agribusinesses, RMS factor had the highest and smallest correlation with timing or type of sales modification (0.95) and Borrowing (0.54). Furthermore, in medium agribusinesses, RMS factor had the highest and smallest correlation with timing of sale of output (0.92) and keeping of business record (0.68). In conclusion, MSMAEs managed their risk through investment, budgeting and marketing strategies. It was recommended that regular capacity building especially in the area of record keeping, maintaining accurate and up-to-date financial record, budgeting cash flow and outflows and conducting basic financial analysis couple with effective marketing management system should be given priority in risk management strategies in the sector.

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Enterprise Risk Management and the Survival of Small Scale Businesses in Nigeria

Cited by 5 publications

References 12 publications

Profitability of Agricultural Micro and Small-Scale Enterprise in North Wollo Zone, Amhara Regional State, Ethiopia

Profitability of Agricultural Micro and Small-Scale Enterprise in North Wollo Zone, Amhara Regional State, Ethiopia

Enterprise Risk Management Practices and Survival of Small and Medium Scale Enterprises in Nigeria

Risk Management Strategies of Micro, Small and Medium Agribusiness Enterprises in North-West, Nigeria

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