The perceptions of Zimbabwean SMEs on the relevance of risk management in their businesses

Abstract

SMEs are faced with different types of risks while running their businesses and RM could play a vital role in dealing with these risks. Therefore, it is crucial to examine the SMEs perceptions on the relevance of risk management in the success of their businesses as it might influence SMEs owner-manager to adopt or ignore RM practice. This study was conducted to establish the perception of SMEs on the relevance of risk management in the success of their businesses. The study was conducted among SMEs who reside in two provinces of Zimbabwe namely Harare Province and Mashonaland Central province. In order to achieve the main purpose of the study, a mixed method research design was used. The target population of the study include Small to Medium Enterprises from all sectors in Zimbabwe’s ten provinces. The study’s target population was around 780 684 and the sample was 278 respondents. The study used a combination of cluster sampling and simple random sampling methods to select the sample. Data was collected using structured-questionnaire and semi-structured interviews to SMEs in Harare and Mashonaland Central provinces. The findings of the study show that the SMEs have a negative perception on the relevance of risk management in the success of their businesses. Thus, risk management is not relevant for SMEs due to their size and is viewed as more relevant to big businesses who have the resources and have much at stake. The researcher concluded that the perception on the relevance of risk management is negative in Small to Medium enterprises in Zimbabwe and recommended SMEs capacity building on risk management, transformation of SMEs business norms, review of SMEs policy framework and SMEs networking in order for them to obtain risk management skills and knowledge.