AN ASSESSMENT OF MICRO SMALL AND MEDIUM ENTERPRISES (MSMES)'S RISK MANAGEMENT PREPAREDNESS: A CASE OF MSMES IN LUSAKA'S CENTRAL BUSINESS DISTRICT

This study sought to investigate the risk management preparedness of Micro, Small, and Medium Enterprises (MSMEs) in Lusaka’s Central Business District (LCBD), focusing on the types and effectiveness of risk management strategies employed by the MSMEs. A cross-sectional research design combined with a quantitative approach was used, surveying 385 MSMEs. Data was collected through structured questionnaires distributed using a convenient sampling method. Descriptive statistics and regression analysis were employed to examine the relationship between risk management strategies and preparedness levels. The findings revealed that only 24% of MSMEs were adequately prepared for risks, with risk avoidance and risk spreading being the most common strategies. Regression results showed that risk transferring had the highest positive impact on preparedness, with MSMEs utilizing risk transfer strategies being 20.6% more likely to be prepared. Risk avoidance followed closely, with a 15.2% increase in preparedness, while risk spreading contributed to a 12.8% improvement. In contrast, risk retention showed a negative relationship, with MSMEs relying primarily on risk retention strategies being 9.1% less likely to be prepared. The study suggests that MSMEs should diversify their risk management strategies and recommends that policymakers, financial institutions, and development partners support MSMEs through awareness campaigns, accessible insurance products, and capacity-building programs. Ultimately, the study concludes that strengthening MSMEs’ risk resilience requires a balanced approach to risk management. Keywords: MSMEs; Risk Management Strategies; Lusaka’s Central Business District