An Assessment of Risk Management of Small and Medium Scale Enterprises in Nigeria

Abstract

This study adopts a survey research design to assess the level of  risk management by SMEs  in Nigeria  with particular emphasis  on the level of accounting records maintained  by SMEs and the insurance policy cover undertaken by  their business with a view of reducing their risk. To achieve the objective of the study, one hundred and ten (110) SMEs in Benue state operating in eleven (11) different lines of businesses were selected. An open-ended questionnaire was distributed to each Owner or Manager of the SMEs selected for the study and the data collected were analyzed using descriptive statistics. The findings reveals that SMEs do not maintain proper accounts as a result they cannot be able to identify, assess and plan the management of their business risk effectively. More so, about eighty four percent of SMEs do not cover their business against risk. This clearly indicates that risk management by SMEs is low. The study recommend among others that SMEs should try to maintain proper books of accounts so that they will be able to plan, identify, asses and manage their risk effectively, in addition SMEs owners as a matter of necessity should take an insurance policy for their business as this may not only help to protect them against uncontrollable risk, but will help to bring them back to their position whenever they suffer losses.

Keywords: Small and Medium Scale Enterprises, Accounting Record keeping, Insurance Policy, Risk Management, Benue State - Nigeria.