Business risks management and financial performance: a case of selected Small Medium Enterprises in Adjumani town council, Adjumani district-northern-uganda
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Date
2026-04-22
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Uganda Christian University
Abstract
This research was card out to analyze the relationship between Business Risks management and the Financial Performance of the Small Medial Enterprises in Adjumani Town Council, Adjumani District –northern Uganda. The specific objectives of the study were; “to assess the effects of Financial Risks management on the financial performance”, “to Examine the effects of Human Risks management on the financial performance” and “to analyze the effects of Independent Risks management on the financial performance” of SMEs in Adjumani Town Council-Adjumani District respectively. The investigation was focused on the effects of Finance risks, human risks and independent risks managements on the Financial Performance of the selected SMEs with the view of strengthening their Business Risks Management (BRM) capacities for enhancing their Financial Performance. A Quantitative design was adopted to enable convenient data access and numerical analysis of finial performance. Open ended questionnaires with rated score scales were used to extract data from 72 respondents (sole SMEs and group partnership SMEs with their employees). The field data were subjected to Statistics for Social Sciences, analysis and interpretation of table and figures generated reveals that; Business risk and financial performance are mischievous. Major business risks are; financial risk (cash loss or insolvency), human risk (employee errors or mistakes) and independent risks (unexpected damages or disasters). Financial risk is the most critical business risk challenging the financial performance of SMEs especially sole SMEs are at higher risk than group partnership SMEs. Knowledge of risk control strategies does not improve financial performance of SMEs unless they become personal habit (culture) of business employees as major expositors to risk factors. The effective mitigation of business risk should begin from limiting human risks projected beyond qualification or just good records but rather a habit of consistent value of resources (capital goods or assets) and self-experience in financial discipline. The challenges of independent risks are high for SMEs due to defective risk monitoring system of most SMEs and only effective engagement can bail out the financialperformance SMEs.
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Undergraduate