MSMEs are facing a tremendous amount of uncertainty these days. Between the impacts of COVID-19, uncertain business futures, and changing economic realities, MSMEs are facing the brunt of the impact.

Risk management therefore becomes a critical segment of an MSME’s business planning and operations. But as the potential for numerous risks is currently high, and as the business world continues to combat the shifts created by the pandemic, it is challenging to know where to begin.

For this reason, the Pearl Initiative is delighted to welcome an expert on small business management to lead this novel Ask Me Anything (AMA) session on risk management for MSMEs.

Participants are invited to submit their questions on MSME decision-making and risk management, and to join the AMA session where their queries and concerns will be addressed by our expert.

During this AMA, we learned the following:

• Risk management is a core segment of a sustainable corporate governance framework, especially for fast-growing companies and for companies struggling due to COVID-19.
• Entrepreneurs need to start thinking about risk management from the get-go or as soon as they start thinking about building a business of their own.
• Business should think about risk management based on the market, industry, regulations, and the sectors they work in. Based on these factors, the risk management framework can be set up for different MSMEs.
• Merging with a competitor would mean increasing a business’ market share, but increases risk – particularly with external risks that a larger market share would invariably bring on.
• Financial, reputational, managerial, security, and digital risks are common risks that are faced by MSMEs regardless of sector or industry.
• Cash flow issues are the core financial risk faced by businesses during COVID-19. Businesses should be paying extra attention to their financial flows and putting in place different scenarios to mitigate different levels of risks.