MSMEs Competency: Parallel to Risk Management Practices and Holistic Approaches

MariaJewdaly Lagasca COSTALES; Paraluman L Veloz; Leny Vito Salmingo

doi:10.36948/ijfmr.2025.v07i06.54925

MSMEs Competency: Parallel to Risk Management Practices and Holistic Approaches

Author(s)	Dr. MariaJewdaly Lagasca COSTALES, Dr. Paraluman L Veloz, Dr. Leny Vito Salmingo
Country	Philippines
Abstract	In today’s uncertain business environment, Micro, Small, and Medium Enterprises (MSMEs) play a vital role in economic growth, especially in developing countries like the Philippines. However, their limited access to management tools and resources makes them vulnerable to risks. This study examined the relationship between risk management practices and MSME competency, guided by the COSO Enterprise Risk Management (ERM) Framework (2013). It aimed to: (1) analyze MSME profiles (income, sector, assets, employees, years of operation); (2) assess the usage and effectiveness of risk management practices; (3) identify differences and relationships across business profiles; and (4) propose a practical risk management action plan. Findings showed that most MSMEs earn Php 9,000–35,000 monthly, have assets below Php 3 million, employ fewer than 10 workers, and operate mainly in wholesale/retail trade. Despite resource constraints, risk management—particularly in compliance, financial, and strategic areas—was rated “highly effective.” Significant differences emerged by income, assets, and years in operation, while correlation analysis revealed a strong positive link (r = 0.6102) between risk management effectiveness and overall competency. The study proposed a development plan including seminars on sustainable risk strategies, simplified loan processes, and digital promotion tools to strengthen MSME resilience and long-term sustainability. The research supports the UN Sustainable Development Goals (SDGs): SDG 8 (Decent Work and Economic Growth), SDG 9 (Industry, Innovation, and Infrastructure), SDG 11 (Sustainable Cities and Communities), and SDG 17 (Partnerships). Overall, it highlights the transformative role of integrated risk management in enhancing MSME performance, resilience, and competitiveness.
Keywords	Risk Management Practices, Holistic Competency, COSO ERM Framework, Strategic Risk, Compliance Risk, and Financial Risk
Field	Business Administration
Published In	Volume 7, Issue 6, November-December 2025
Published On	2025-12-31
DOI	https://doi.org/10.36948/ijfmr.2025.v07i06.54925

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MSMEs Competency: Parallel to Risk Management Practices and Holistic Approaches

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