Risks Faced and Mitigation Strategies Employed By Small and Medium Enterprises in Nairobi, Kenya

Kagwathi, Githii Stephen; Kamau, Joseph Ngugi; Njau, Mary M.; Kamau, Stephen Maina

doi:10.9790/487x-16450111

Cited by 7 publications

(7 citation statements)

References 13 publications

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“…Ahmed and Muntaka (2012) discovered that CEOs with internal loci of control outcomes, implement the structures and processes of environmental monitoring to meet the contingencies of their chosen strategies. Several studies (Awino, 2013;Jaoua and Radouche, 2014;Kagwathi, Kamau, Njau, and Kamau, 2014;Kariuki, 2015, Mitchelmore andRowley, 2013;Napoli, 2012;Njoroge and Wario, 2015;Sandada, Pooe, and Dhurup, 2014) revealed that lack of strategic planning was a constraint to SMEs' gaining access to credit to improve business performance. Awino (2013) found SMEs that use strategic planning were more likely to gain access to credit and other financial resources than those that do not, which results in sustainable business performance.…”

Section: Strategic Planningmentioning

confidence: 99%

“…Awino (2013) found SMEs that use strategic planning were more likely to gain access to credit and other financial resources than those that do not, which results in sustainable business performance. Kagwathi et al (2014) revealed that SMEs lack risk mitigation strategies, which affects their credit scores. The authors found that a credit score allows SMEs to access formal credit that matches the risk and performance of the business.…”

Section: Strategic Planningmentioning

confidence: 99%

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Strategies for Accessing Credit by Small and Medium Enterprises

Ogoi

2017

IJARBSS

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Small and medium enterprise business owners play an important role in the Kenyan economy as they account for approximately 78 percent of total employment and 57 percent of the new jobs created. Despite their significant contribution, SME business owners face enormous challenges as such as access to credit, which affects their businesses. This study adopted a qualitative research paradigm with a multiple case study design to explore the strategies Kenyan SME business owners used to access credit to improve the profitability and growth of their businesses. Semi-structured interviews were used to collect primary data from a sample of four SME owners of businesses located in Kakamega Town, Kenya, who have had access to credit. Company documents were used as supplementary data. All interpretations from the data were subjected to member checking to ensure the reliability of the findings. The research findings revealed that SME business owners face challenges in accessing credit to sustain their businesses because of the higher collateral requirements demanded by banks as a condition for lending. The study recommended that SME owners use their education and professional background, information access and group lending strategies to access credit to improve the profitability and growth of their businesses.

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Section: Strategic Planningmentioning

confidence: 99%

Section: Strategic Planningmentioning

confidence: 99%

Strategies for Accessing Credit by Small and Medium Enterprises

Ogoi

2017

IJARBSS

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“…In other words, studies have shown that only very few SMEs remain variable pass the 5 years period mark which is indicative that majority of SME businesses collapse before their 5th year anniversary (Owduri, 2012;Belá s et al, 2014;Afolabi, 2018). Therefore, to ensure business sustainability of SMEs, there is the need for SME owners and managers to develop the ability to correctly identify risks and take appropriate risk management steps to cure the risk (Kagwathi et al, 2014).…”

Section: Risks In Smesmentioning

confidence: 99%

“…The environment in which SME businesses operate, is continually evolving and, as a result, the risks it faces are continually changing hence risk management strategies must be practiced (Idemobi, 2012). A sound system of risk management therefore depends on a thorough and regular risk management strategy which seem to be lacking in the sector (Kagwathi et al, 2014).…”

Section: Risk Management Practices Of Sme Ownersmentioning

confidence: 99%

The Effect of Risk Management Practices on Performance of Small and Medium Scale Enterprises

Apaloo¹,

Bright²

2022

ERM

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The main objective of the research is to examine the effect of risk management practices on performance of Small and Medium Scale Enterprises (SMEs). The convenience sampling method was used for the study. The study used a sample size of 285 small and medium scale enterprise businesses for the analysis. The study used primary data obtained through questionnaire administration which was analysed using SPSS 25 and Microsoft Excel 2019. The study used both descriptive and inference analysis to analyse the data. According to the findings, low educational level of respondents helped to conclude that risk management is not widely practiced in SME businesses. Risk management practices are not well practiced in SME business because the SME owners possess low level of knowledge in the areas of identifying, assessing, treating and monitoring key operational risks. The positive relationship between risk management practices and performance is indicative that the proper practice of risk management by SME managers or owners influences performance. The significant relationship between the dependent variable (performance) and independent (risk management practices) provided the conclusion that, the more SME businesses improve on their risk management, the more they improve upon their performance. The study recommends an improvement in risk management knowledge for SME business owners and managers. The government should take adequate steps to provide risk management support for SMEs sectors. The study recommends SME businesses to put in place systems that enable the documentation of the business operations.

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“…One of the enhancement strategies is frequently training their people so as to make them define hazards and their underlying causes, and in predicting their occurrence, and relevant controlling techniques. Without such trainings, there will be internal inefficiencies (Kagwathi, Kamau, Njau, & Kamau, 2014). The study recommends for the need to have frequent risk management trainings to SME workforce so that they can enhance their competencies in risk planning, risk controlling, and strategic risk initiatives, and eventually link them with their business operations.…”

Section: Conclusion and Recommendationsmentioning

confidence: 99%

Risk-Taking and Performance of Small and Medium-Sized Enterprises: Lessons from Tanzanian Bakeries

Jeje¹

2020

JEBS

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SMEs are the major drivers of socioeconomic development of many economies. In order to influence economic growth, SMEs must be capable of enhancing their competiveness, growth, and sustainability. These capabilities are acquired by SMEs that understand and adopt entrepreneurial strategies that work. There is abundant literature confirming that one of these entrepreneurial strategies include risk-taking practices. SMEs are still facing challenges to understand and apply the right risk-taking strategies that influence their performance. We therefore characterise risk-taking as risk planning, risk controlling, and strategic risk initiatives, and seek to establish their contribution on SME performance. This study draws lessons from the risk management practices of small and medium-sized bakeries in Tanzania where agriculture, a sector that directly relates with bakery business, is one of the leading sectors in driving economic growth. We adopt a multi-stage sampling technique and receive responses from 161 questionnaires, and 20 in depth interviews from bakery owners/managers throughout Tanzania. The principal component analysis, qualitative content analysis (manifest analysis), and the moderator analysis are used in analyzing these data. We ascertain that both the firm age, and the gender, of the owner/manager moderate the relationship between risk-taking strategies and SME performance. We argue that SMEs have the responsibilities of improving their risk-taking practices and capabilities in order to drive their competitiveness. Additionally, SMEs need to employ their efforts and resources in supporting their risk management initiatives, and integrate them in their business operations, and policy development practices, and ultimately advance their sustainability.

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Risks Faced and Mitigation Strategies Employed By Small and Medium Enterprises in Nairobi, Kenya

Cited by 7 publications

References 13 publications

Strategies for Accessing Credit by Small and Medium Enterprises

Strategies for Accessing Credit by Small and Medium Enterprises

The Effect of Risk Management Practices on Performance of Small and Medium Scale Enterprises

Risk-Taking and Performance of Small and Medium-Sized Enterprises: Lessons from Tanzanian Bakeries

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