The Implementation of Risk Management Strategies in SMMEs in Ngaka Modiri Molema District
Matlholwa, Kgomotso Maikano Glynis
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SMMEs are faced with various risks which have impacted greatly on the growth rate of this sector in South Africa. The purpose of this study is to examine the implementation of risk management strategies in SMMEs in Ngaka Modiri Molema District. The Bohlmann's Risk Theory, the Social Theory and the Financial Gap Theory form the theoretical foundations of this research study. The study adopted a mixed methods approach. Qualitative research design (indepth interviews) was utilized to gain an indepth insight on the type of risks being faced by SMMEs in Ngaka. The quantitative research design (questionnairres) was used to evaluate the effectiveness of risk management processes.For quantitative data, variance analysis and correlation were performed to analyse the relationship between the various existing variables and to test interactive variables through Statistical Package for Social Sciences (SPSS). Content analysis was used for qualitative data and findings were presented in form of themes. The findings of the research study clearly indicate that majority of the respondents agree that SMMEs are facing financial risks, market risks and other types of risks , furthermore the findings indicate that SMMEs implement the various risk management strategies namely accepting risks, avoiding risks and reducing risks. The study recommends that SMMEs should establish risk management plans, customer relationships, recruit people of the right skills, knowledge and competencies, create risk culture, risk awareness and risk communication and last but not least ensure effective and efficient financial management within their various SMMEs. The study further recommends best practices SMMEs could implement to ensure effective and efficient risk management.