Covid–19: Pandemic Risks and SMEs Sustainability in Developing Nations: Evidence from Nigeria

Abstract

Due to the COVID–19 pandemic, several Small and Medium Scale Businesses have collapsed. This paper therefore examines COVID–19, risk management and SMEs sustainability in developing nations. The main objective of this paper is to suggest implementable risk management strategies that can help revamp the business operations of SMEs. The specific objectives are to ascertain the effect of COVID–19 on SMEs business operation; and to determine the role of effective risk management strategies in revamping SMEs business operation from COVID–19 pandemic. The study made use of cross-sectional design approach which recognises that data be collected at one time. The population of this study consists of all the small and medium scale enterprises (SMEs) in Lagos State. Ordinary Least Square of Regression model was employed to test the hypotheses of this study. This paper revealed that COVID–19 has significant negative effects on SMEs business operation; effective risk management strategies such as risk avoidance, reduction, sharing and retention can play a significant role in revamping SMEs business operation from COVID–19 pandemic; and adequate financing can mitigate the negative effect of Covid–19 on SMEs business operations. Arisen from the analysis of the study, this study recommended that financial institutions should make more funds available to SMEs especially in the face of Covid–19 pandemic; and SMEs should employ effective risk management strategies such as risk avoidance, reduction, sharing and retention.