Abstract:
At present, small and medium enterprises are considered important, because they are
contributing to GDP, employment, and rural development, and as a whole economic
development" etc. There is so far lack of research has been conducted concerning the
risk management of SMEs in Sri Lanka. So, this research study is to identify how risk
management practices (Risk Management Environment, Policies and Procedure, Risk
measurement, Risk mitigation, Risk monitoring, and Internal control) affect the
performance of small and medium enterprises in Ampara District.
The study mainly considering identifying the levels of risk management practices, the
relationship between risk management practices and enterprise performance, and the
impact of risk management practices on enterprise performance. For that, primary data
were collected via an online questionnaire by google forms. A questionnaire was
distributed among 210 owners of small and medium enterprises in Ampara District
because the owner and manager are the same people in most enterprises. So, they are
qualified to answer the questionnaire relate to the risk management of enterprises. Tie
data were analyzed by using descriptive, correlation analysis. and multiple regression
analysis.
The study result shows that Risk Management Environment, Policies and Procedure.
Risk Measurement and Internal Control has Moderate level. Risk Mitigation and Risk
Monitoring has a high level in SMEs. The results indicate that there is a Strong positive
relationship between Risk Management environment, policies and procedure and
enterprise performance, Risk Measurement and Enterprise Performance, Risk
Mitigation, and enterprise performance and Risk Monitoring and Enterprise
performance, and Internal Control and enterprise performance. There is a significant
positive impact of Risk Management Environment, Policies and Procedure, Risk
Measurement, Risk Mitigation, Risk Monitoring, and Internal Control on the enterprise
performance.