RISK MANAGEMENT SYSYTEMS USED IN MANUFACTURING SMALL AND MEDIUM ENTERPRISES IN MASVINGO, ZIMBABWE

Abstract

Small and Medium Enterprises (SMEs) have been labelled as engines for economic growth the world over. In Zimbabwe however SME development has been hampered by a number of identified causes. Amongst them Mudavanhu et al (2011), Chidoko et al(2011) and Zindiye (2011), in their researches, identified some of the challenges as lack of skills in human resources, poor managerial skills, lack of capital, poor accounting systems, unavailability of credit, import competition, high cost of raw materials. The SMEs have thus failed to satisfy the engine for growth function as was expected by most economists. The current study aimed at finding out if SMEs are doing something about mitigating against the causes of failure and suggest ways that they can adopt to contribute to sustainable development. The descriptive survey design was used to describe the risk management systems in place. The study found out that internal controls such as security guards, generators in place of electric systems and in rare cases insurance are the risk management systems that SMEs rely on mostly. The study recommended entrepreneurial skills education as a pre-requisite for good and improved performance in SMEs. Owners/managers should communicate business objectives to all the employees through training and development, so that they own the objectives and ensure that there is continuity in the operations of the business resulting in minimal or zero losses and sustainable development