ASSESSMENT OF PROPERTY RISK MANAGEMENT PRACTICES OF SMALL AND MEDIUM ENTERPRISES IN TANZANIA

ASSESSMENT OF PROPERTY RISK MANAGEMENT PRACTICES OF SMALL AND MEDIUM ENTERPRISES IN TANZANIA

ASSESSMENT OF PROPERTY RISK MANAGEMENT PRACTICES OF SMALL AND MEDIUM ENTERPRISES IN TANZANIA
(The Case of Retail Shops in Kinondoni Municipal, Dar es Salaam)
LAMBERT, Godlove Nkulu
Bachelor of Business Administration
University of Dar es Salaam Business School
August 2018
ASSESSMENT OF PROPERTY RISK MANAGEMENT PRACTICES OF SMALL AND MEDIUM ENTERPRISES IN TANZANIA
(The Case of Retail Shops in Kinondoni Municipal, Dar es Salaam)
LAMBERT, Godlove Nkulu
A Research Project Submitted in Partial Fulfilment of the Requirements for the award of Bachelor of Business Administration (BBA) of the University of Dar es Salaam Business School.

University of Dar es Salaam Business School
August, 2018
DECLARATION
I declare that the originality of this project is mine except for some parties which were duly acknowledged.

Thus, this project has never been submitted for any other degree award in this university or any other university.

Signed_______________________________ Date__________________________
Name: LAMBERT, Godlove Nkulu
REG. NO: 2015-04-09245
This project has been submitted for examination with my approval as a supervisor.

Signed______________________________________Date__________________________
Mr. Gilbert Mboya
Lecturer, Department of Finance
University of Dar es Salaam Business School
ACKNOWLEDGEMENT
Above all thanks’ goes to my maker, God the Almighty. It has been an interesting as well as educational study period at the University of Dar es Salaam Business School. As much as I feel privileged to have experienced the knowledge gained through this project writing, there are some individuals I must sincerely acknowledge their involvements in one way or another. Without these individuals it would have been really difficult to see this study through with quality and in time.

I am deeply obliged to my supervisor Mr. Gilbert Mboya for his mentorship, encouragement, support, and guidance during all the time of writing this project. His critics and comments are the cornerstone of this project. The project is a success because of his support and advices whenever required. Also, I would like to thank all the retail shops responded during data collection for their provision of information needed by the study.
Finally, I would like to acknowledge all the support I got from all the staffs of the University of Dar es Salaam Business School Library. Moreover, further acknowledgement goes to the staffs of the business school for their unending support during my presence at the university. My deep gratitude goes to my colleagues in my class for their support and encouragement including George Ngatunga, Patrick Muhere and Loveness Lyimo.

DEDICATION
To my family and friends, thank you all for understanding my absence during study time.
In loving memory of my mother Elizabeth K. Mabruky and my sister Godliver B. Kadunda, may you rest in peace.ABSTRACT
Risk management is an important requirement for any business. In Tanzania, property risk management has been neglected by the small and medium enterprises. This study aimed at assessing property risk management practices of small and medium enterprises (SMEs) in Tanzania. Through questionnaires the data was collected from 100 personnel working in retail shops of Kinondoni municipal in Dar es Salaam and analysis was done using the Statistical Package for Social Sciences (SPSS). The findings evidenced that there are significant relationships among high awareness level, risk management and the practices of property risk management. On risks faced by retail shops were found to justify the presence of risk management as a source of property risk management practices. The findings also justified the relationship among techniques used, risk management and property risk management practices. Among the risk management practices used, insurance was least used. The study findings implied that small and medium enterprises players need more awareness on property risk management. Also, insurance companies can be more engaged with the SMEs in order to come up with reasonably priced packages for SMEs. Also the government can play a role in ensuring professional risk management education to SMEs as well as giving access to affordable insurance services.
LIST OF ABBREVIATIONS
SMEs Small and Medium Enterprises
UNIDO United Nations Industrial Development Organization
GDP Gross Domestic Product
BBA Bachelor of Business Administration
ILO International Labour Organization
URT Government of Tanzania Publications
SPSS Statistical Package for Social Sciences
LUKU Lipa Umeme Kadiri Utumiavyo (Pay for electricity as you need it)

CHAPTER I
INTRODUCTION
Overview
Chapter one begins with lighting up the background of this study. In addition, it explains about the problem statement which leads to general objective and specific objectives. Moreover, it outlines the research questions followed by brief descriptions of the rationale of the study and finally, it ends up with the scope of the study.

Background to the Problem
Small and Medium Enterprises (SMEs) serves as an engine for economic development in the world especially the least developed countries such as Tanzania (Masataka, 2007). This is due to the fact that SMEs makes up more than 90 percent of all business enterprises in the developing countries and create employment for over 50 percent of the population (UNIDO, 1999). On average, more than 60 percent of the gross domestic product (GDP) in Tanzania comes from the business sector (Frimpong, 2013). According to Olomi (2006) Tanzania’s economic growth and development are contributed by asignificant role played by the SMEs. That means a large part of that income is generated in the small and medium enterprises (SMEs). Therefore, the growth and prosperity of small and medium enterprises will cause the development of the Tanzania’s economy.

In spite of the significant contribution made towards an economic development, yet the small and medium enterprises (SMEs) in the least developing countries face various challenges which restrict them from growing (Mamman, Kanu, Alharbi, and Baydoun, 2015). These challenges are inadequate access to finance, marketing difficulties, poor infrastructure and modern technology, regressing government regulations such as excessive taxes, levies and fees and poor managerial skills (Kotey, Mazzarol, Clark, McKeown, and Battisti, 2015). Also, Cook and Nixson (2000) suggested that among the factors restricting small and medium enterprises (SMEs) are low access to finance, insufficient, market competitions, the high cost of resources.

Parker, Riopelle, and Steel (1995) examined the limited access to finance is the major challenge which would have made operations easy from the resources purchasing to the business operations which require funds. Access to finance is being limited because majority of the small business enterprises owners do not possess the collateral for securing a loan from a financial institution. Kessy and Temu (2010) said that small and medium enterprises (SMEs) have high restrictions on access to finance including access from the formal financial institutions due to high risk of lending them. This is because majority of small and medium enterprises (SMEs) loans are bound to default. Therefore, it’s very risky for any financial institutions to lend small and medium enterprises (SMEs).

Aboagye and Jones (1998) found that products or services of the small and medium enterprises are mainly for the domestic market. Few of them produce for the foreign market. The few products produced fails to penetrate the foreign markets due to stiff competition. Also, the issue of market competition does affect even the domestic products or services because of the dumping of products from foreign industries with financial strength, technology, and personnel.

According to Anderson (1998) small and medium enterprises have little financial muscles which do not allow them to operate under capital intensive technology. For instance, the technology used by these firms is very low due to the low cost of acquiring and operating the machines. In addition, Olu (2009) found that small and medium enterprises have a very small number of skilled workers who can operate machines efficiently and effectively.

World Bank (2010) points out that the business environment in most developing countries tends to comprise of unfriendly government regulations and policies which limit the small and medium enterprises from growing. Also, government regulations from the public regulators could be a solution even though in most cases they are not since government decision makers abuse power for their own self-interests. Peltzman (1976) and Stigler (1971) went on claiming that the majority of least developing countries regulations do not favour businesses in general. As a result, there are high tax rates, bureaucracy, and corruption which hinder small and medium enterprises from growth.

Herrington (2010) conducted a study in South Africa and found that managerial skills are a big challenge facing small and medium enterprises (SMEs). This is an outcome of inadequate education as well as training for the owners or managers of the small firms. As the study was reported on Global Entrepreneurship Monitor of the year 2001 up to 2010, showed the high rates of small and medium enterprises failed because of the insufficient managerial skills which brought very small numbers of surviving businesses in the country. In addition, the study about the small business owners and managers which was done in the Caribbean named the significant managerial skills such as competent administration, detailed planning and budgeting and lastly marketing activeness in general (Huck and McEwen, 1991).

In small and medium enterprises the managerial skills contribute a lot to business performances through a manager who possesses the skills. Such manager will help the firm to secure funds from various sources such as business angels, family members, and micro finances through the use of skills for example by preparing a sound business plan. The skills will also help business in gaining potential customers through various marketing plan strategies. Therefore, strategies and policies prepared by the skilled manager or owner will lead a business to win the qualified personnel for the firm (Papulova and Mokros, 2007).

It is inevitable taking risk management subject out of the small business contexts. Hence it cannot be taken for granted due to its importance in making sure the business’s prosperity does not occur accidentally. Ong (2006) defined risk management as “the systematic application of management policies, procedures, and practices to the tasks of establishing the context, identifying, analysing, assessing, treating, monitoring and communicating”.

Miller (1992) and Brustbauer (2014) claimed that small and medium enterprises are exposed to risks. Proper risk management enables a firm to flourish because risks would be identified and prepared for once they fall due. However, poor risk management can expose the firm to risks which would terribly damage the business (Hollman and Mohammad-Zadeh, 1984). According to Marcelino-Sádaba, Pérez-Ezcurdia, Echeverría-Lazcano, and Villanueva (2014) most small and medium enterprises practices poor risk management or they sometimes fail to practice risk management due to challenges they face such as access to finance.

Solomon (1982) classified risks into two broad ways that is pure risk and speculative risk. Pure risk involves risk that contains the possibilities of only a loss or no loss for example earthquake. Speculative risk contains the possibility of profit or loss for example gambling. Pure risks are insured while speculative risks are not insured. Small and medium enterprises are faced with several risks such as pure risk, speculative risk, strategic risk, operational risk and financial risk (Fraser and Simkins, 2010).

A firm must manage risk in order to grow. However, the type of risk which is business wise manageable is a pure risk since they are insurable (Graham, 2014). Pure risks are classified into three major types, namely personal risks, property risks and liability risks (Graham, 2014). Out of the three, for developing countries’ small and medium enterprises, the area of property risk should be looked at closely. Since small and medium enterprises have a tendency of keeping large stocks, therefore this subject is of great interest due to the value of properties to the business (Fraser and Simkins, 2010). That means, for many small businesses, stocks of goods and business properties are a largest component of their assets/capitals.

According to Solomon (1982), property risk is a risk of the properties possessed by a firm or individual being damaged or lost. The sources of the damage or loss might be flood, earthquake, fire or theft. Also due to the fact that small and medium enterprises operate under low financial budget while the human capital needed is low, therefore personal and financial risks are not of interest compared to property risks (Graham, 2014).

Lots of research studies were done in an area of risk management of small and medium enterprises (SMEs) for instance Maria and Hiebel (2015), Henschel (2008), Henschel (2006), Sifumba, Mothibi, Ezeonwuka, Qeke, and Matsoso (2017), Zoghi (2017), Samugwede and Masiyiwa (2014), Sunjka and Emwanu (2015). The research about risk management in SMEs was done by Maria and Hiebl (2015).

Also, evaluating and implementing effective risk management systems was done by Henschel (2008). Moreover, Henschel (2006) conducted a research on risk management practices in German SMEs. Sifumba et al., (2017) did a study about the risk management practices in the manufacturing SMEs in Cape Town. Zoghi F. S. (2017) performed a research on Risk Management Practices and SMEs: An empirical study on Turkish SMEs.

Also, Samugwede and Masiyiwa (2014) did research on evaluation of risk management practices in SMEs in the manufacturing sector of Gweru, Zimbabwe. Finally, Sunjka and Emwanu (2015) researched risk management in manufacturing SMEs in South Africa. Since the risk management field is not very popular in Tanzania, so the researches done on risk management are satisfying but not enough. There is a lack of enough literature on SME risk management in Tanzania. Therefore, this research will analyse the risk management practices of small and medium enterprises in Tanzania.

Statement of the Problem
Small and medium enterprises are exposed to various property risks in their everyday course of business. However, property risk is somehow neglected in the field of small and medium enterprises (SMEs) regardless of its importance. Careful business owners and managers do manage the property risks of their businesses. By doing so, they become on the safe side while conducting business and be assured that gaining profit is not accidental.
A deserved attention is needed to be given about the current practices of property risk management. To do that importance is to be given to the awareness of the risk management to the owners and managers of the small and medium enterprises. Also understanding of the risks faced and techniques they use to manage those risks needs to be established. Therefore, this study will assess the property risk management practices of SMEs in Tanzania. This research’s analysis is based on the methods used to do property risk management by retail shops in Kinondoni Municipal in Dar es Salaam city.

Objectives of the Study
General Objective
In general, the research attempts to understand the property risk management practices of the small and medium enterprises (SMEs) in Tanzania. Specifically, the study aims at achieving the following objectives;
i.To evaluate the awareness of risk management among the SMEs in Tanzania.

ii.To understand main property risks faced by SMEs in Tanzania.

iii.To understand risk management techniques of SMEs in Tanzania.

Research Questions
i.What is the awareness level of risk management among the SMEs in Tanzania?
ii. What are the main property risks faced by SMEs in Tanzania?
iii.What are the risk management techniques of SMEs in Tanzania?
The Rationale of the Study
This research is significant in three ways. Firstly, it is a necessity for the researcher’s fulfilment of the requirements in completion of his Bachelor of Business Administration (BBA). Secondly, this study will add to the body of knowledge about the risk management practices of small and medium enterprises in Tanzania. Thirdly, the study will expose risks faced by and methods of risk management by SMEs, which is important information to policy makers working for the progress of the small and medium enterprises in Tanzania.

The Scope of the study
This study will cover retail shops in Kinondoni Municipal, Dar es Salaam as a representative of SMEs’ in Tanzania. This is because retailers make over 60% of SMEs in Tanzania, hence, employing in that proportion of the total SME employment. This study will cover a small geographical area due to lack of enough financial resources and limited time that could expand its scope beyond Dar es Salaam.

CHAPTER II
LITERATURE REVIEW
Overview
This section reviews the literature for this study. Information contained in this chapter includes definition of key concepts, theoretical literature review and then the empirical literature review on property risk management in SMEs. By reviewing various sources of literature, the understanding of this subject will be widely achieved. The conceptual framework and the research gap will also be presented.

Definition of Key Concepts
Small and Medium Enterprises (SMEs)
Small and Medium Enterprises explanations have been varying from country to country. Still, there is no single accepted definition of small and medium enterprises worldwide (World Bank, 2010). Thus, each country has to come up with their own definition of SMEs according to their economic level (ILO, 1998). There are features which normally appear on explanations about SMEs such as employee numbers, amount of investment, sales turnover (Carson, 1995).
SMEs in Tanzania have been defined by the SME development policy of 2003. In short, according to URT (2003) in Tanzania, SMEs means involved in formal business with the followings criteria being adhered. First micro enterprises comprised of 1 to 4 employees with capital not more than TSH. 5millions. Small enterprises are classified between 5 employees and not more than 49 employees with capital exceeding TSH 5millions but not exceeding TSH 200millions. Medium enterprises’ having 50 employees up to 99 employees with capital more than TSH 200millions but not exceeding TSH 800millions. Finally, large enterprises have more than 100 employees and the capital exceeding TSH. 800millions. From the above explanation, an SME is any enterprise that is not in the group of large enterprises.

The State of Small and Medium Enterprises (SMEs) in Tanzania
SMEs are characterized by having little capital amounts, small-scale businesses, labour intensive in nature, unskilled management, a heart of creativity and entrepreneurial centre (Duta and Evrard, 1999). In spite of that, SMEs have been reported differently by different studies done in the country. According to Chijoriga (2001) SMEs in Tanzania are faced with limited access to finance and unskilled personnel. Also, Rutashobya and Nchimbi (1999) found that business environment and policy are the major constraints upon SMEs growth. However, it can be seen that if the policy, as well as business environment being amended from time to time still SMEs will struggle to grow due to the majority of them they lack skilled management.

Moreover, Steel (1994) study held that limited access to credit, stiff competition, poor infrastructure, low level of technology used by SMEs, regulatory challenges, and high taxes, lack of adequate managerial skills are among the constraints hinders SMEs from growth. Steel’s study concentrated on adjustment to liberalization by SMEs.

Daniel (2007) conducted a study on challenges facing SMEs in Tanzania. He found that limited access to finance from the lending institutions is a major challenge. This being a result of financial institutions viewing SMEs as too risky to lend due to lack of collateral and lack of skilled management.

SMEs growth in Tanzania among other causes can be contributed by different factors such as economic, financial, managerial factor as well as probability factor once mixed together (Bentley, 2001). In addition, probability factor involves a lot of uncertainty and risks (Sparrow, 2000). Probability factor is a result of SMEs owner’s not operating separately from the business which is caused by lack of management skills which leads to poor decision making (Lyles et al., 1994). Hence, the majority of SMEs have the tendency of totally neglecting risks while only a few do pay the slightest attention to risks and uncertainty during their initial operation stages (Smiths, 1999).

Small and medium enterprises’ risks management practices level totally differs with the large-scale enterprises due to lack of managerial skills (Hill, 1988). Therefore, SMEs practicing risk management is often contributed to the belief and attitude of the owner (Bentley and Sparrow, 2000). Without the qualified personnel who operates SMEs’ the rate of failure is going to be higher than that of growing which will be like a lucky (Aylin, 2014).

Risk
Risk or uncertainty must be known prior to having ways of managing it (Dey, 2007). No one can manage risk before knowing it. Risk has got many definitions. Where there is a chance of incurring or suffering from a loss there are risks (Mullins, 1998). Risk simply refers to unexpected result from the original scenario (Kabala, 2015). Therefore, the risk is a coming event which has not happened yet on a cause of operating a business.

Classification and Argument for Pure Risks
Risks are classified into financial and non-financial risks, static and dynamic risks, fundamental and particular risks, and finally pure risk as well as speculative risks (Rejda, 2006 and Dorfman, 2008). But, this study focuses only on the type which is insurable. Pure risks are the ones which are generally insured while the speculative risks are not insured since they occur upon person’s willingness on the cause of making gaining or losing (Rejda, 2006). Therefore, basing on this reason only pure risks components are going to be highlighted and defined with few examples in order to be clearly understood.

Pure risks involve personal risks, property risks and liability risks (Rejda, 2006). Personal risk refers to risks which have a straight influence on a person for instance being unemployed, get disability, and premature death (Rejda, 2006). Liability risk refers to risk which makes someone legally indebted to compensate a party which is damaged as a result of being a cause of the suffered loss or losses (Rejda, 2006). Property risk these are risks which may damage properties through various causes such as fire, theft, accident, natural disaster causes and riots (Rejda, 2006). The loss may be ofassets example, buildings, products, machinery, and plant.

Risk Management
Risk management can be traced back to its origin from the insurance industry for more than four decades. Risk management in SMEs is the systematic technique of identifying, analysing and controlling the associated risks concerning the enterprise (Halman and Weiden, 1998). Risk management is a continuous action for amending as well as advancing various aspects of business resources, legal, operation, and performance, as a result, manage damages to the firm (Dickinsons, 2001). Risk management involves a process of risk identification, risk quantification as well as evaluation, and risk control (Vaughan, 2001). SMEs can achieve their targets, goals, and objectives by proper and systematic practicing of risk management. Hence, enterprise risk management is simply an inbuilt answer to risk management (CIMA, 2005).

Risk Management Process and Practices
Various studies show different stages of dealing with risks (Rejda, 2006 and Dorfman, 2008). The process of managing risks is divided into several parts which are risk identification, risk assessment, risk control, risk monitoring and risk communication (Rejda, 2006).

Risk assessment is used for identification of both qualitative as well as quantitative measures which are in connection with a circumstance posing as a potential hazard. Here risks are identified, analysed and evaluated thoroughly (Alexander and Sheedy, 2006). SMEs may opt for taking the risk since it involves high price on handling it. Also, they can ensure risk by transferring to a third party. Managing risks involves using various ways and techniques in a systematic form to achieve the objective (Dorfman, 2008). Also, a frequently risk monitoring and communicating is needed in this to ensure that control measures can be taken whenever the need arises (Dorfman, 2008). Therefore, through risk processes, one can know which way to adopt in case exposed to risks.

Risk Management Techniques
Modern risk management theory came up with two general suggestions relating to risks handling such as risk control and risk financing (Dorfman, 2008). Risk control tends to have severe impacts as well as often occurrences (Rejda, 2006 and Dorfman, 2008). Example of this is avoidance method and loss control, loss prevention for frequency while loss reduction for severity (Rejda, 2006).

Risk financing deals with ways of compensating for damages since some damage are inevitable from happening. Hence, this is done by shifting amount of cost to third parties. It involves risk retention, noninsurance transfer and insurance (Dorfman, 2008). Therefore, techniques used for managing risks can be said are avoidance, loss control, retention, noninsurance transfer, and insurance.

Risk avoidance merely means removal of risk and its possibilities for example if one does not want to be exposed to divorce risk can just decide never to get into marriage (Rejda, 2006). Loss control is the one used to reduce risk through reduction of risk chances or by just reducing the level of damage (Dorfman, 2008). Risk retention this is the risk condition which normally bigger occurrences which have little impacts (Rejda, 2006). Noninsurance transfer comprised of contract and hedging which involves minimizing risks for later business transactions. Also, a warranty is a good example of such type of method (Dorfman, 2008). Finally, insurance this is the major way of transferring pure risks from many business enterprises because they cover risk which happens involuntarily to a person or enterprises (Dorfman, 2008).

Theoretical Literature Review
For ideas to form a scientific organized logic or structure, various processes have to be connected in order to establish the desired outcome (Pascal, 2017). In this context, theory assists scholars on demonstration of rational knowledge and discoveries about a study of interest towards readers. Therefore, several theories are linked with this study. In short, such theories are agency theory, new institutional economics, and enterprise risk management approach.

Agency Theory
The theory came into existence during the sixties whereby the focus was based on the sharing of risks between parties involved. The theory explains how principal and agent’s connection may differ due to tendencies in dealing with risks (Stremitzer, 2005). There should be interval among factors such as ownership, control, and motives of agent and principal (Stremitzer, 2005). The misunderstanding may arise because of agent’s payoff, time, takeover determination and risk orientations. Managers tend to want to better off their benefits rather than the shareholder’s benefits (Stremitzer, 2005). It is an economic theory which focuses on the interest struggles of connection between the principals and representatives.

The parties involved are enterprises leaders and shareholders. The leaders are appointed by the principals to lead a firm in the best interest of the enterprise (Mayers and Smith, 1987). The theory addresses the duty of a manager in attaining the principal’s goals which will enable the avoidance of agency problem (Stremitzer, 2005). Also, the importance of an agent makes up on risk abiding (Mayers and Smith, 1987). For example, an agent who is a manager may practice risk management, as a result, endangers short-term gains of the principals. Also, it may occur that manager does not practice risk management in order to secure the short-term profits for the principal and expose the business to high risks of failure (Smith and Stulz, 1985). This theory is important since it addresses the relevance of dealing with risks to owners or managers of SMEs even though it fails to address what must be done to achieve that. Therefore, this shortcoming brings about another theory which is new institutional economics to address the issue.

New Institutional Economics
New institutional economics offers that decisions on risk management can be reached by the enterprise itself and it should be about the firm’s business risks (Wiliamson, 1997). Property procurement is connected with this theory (Williamson, 1988). The theory emphasizes risk management practices relevance for an organization but it does not explain how to perform that. The theory is vital towards this study since SMEs representatives may ignore risks management practices, so the firm should be liable for practicing risk management practices even if the manager may seem not to like doing so. Therefore, it leads to another theory.

Enterprise Risk Management Theory
Since risks have the potential of negatively impacting an enterprise, this is the reason behind enterprise risk management. Thus, the impact may be on resources such as properties, human resources but also may be on markets. More often risks expose an enterprise towards a liability positions, therefore, there is a need for a contingency plan.

This theory assumes that risks can either be handled in two ways. The first is by allotting those risks to the particular department which is being faced by them or by concentrating on the general risks threats and deal against them (Lam, 2003). Hence, an enterprise’s main focus will be on pure risks only through being more proactive to the threats.

This theory also put emphasis on having a formal system or process of approaching risks (Miccolis, 2001). It gives way of dealing with threats from the business plan even before the enterprise has been put into actions (Hagen and Wenstøp, 1984). This can be linked with the SMEs by having a well-designed and feasible business plan with such risk management part showing policy and strategy of dealing with risks or minimizing loss. The theory is relevant to this study since it shows what process and methods of control SMEs should follow when it comes to risk management practices by showing what process have to adhere.

Empirical Literature Review
Various researches have been done about general enterprise risk management in the world. As a result, little concerns have been paid to property risk management practices conditions. Therefore, literature review is categorized into the following forms: The ones which explain the general risk management practices, the ones which explain SMEs risk management practices views, and a little proportionate which put emphasis on the property risk management on SMEs.

Chiara (2017) study on new perspectives in managing risks in SMEs focused on corporate and risk administration. The study emphasizes the importance of giving risk management the attention it requires since decisions making is built on it. The focus should be directed to human resources of the organization in order to be aware of the risk management significance.

Raz (2002) found that risk management practices play a major role in influencing enterprise project’s achievement. In this study, they argued that for the project to deliver the goods there have to be a modern risk management practices in an organization. Also, Kwak (2003) conducted a research on risk management and came up with same findings. He claimed for an enterprise’s project to make through risks management practices must be able to choose and analyze the resources allocation for the project.

There is little literature on SMEs risk management because the majority of researches pay attention to large enterprises. The study by Mathews and Scot (1995) found that majority of SMEs lacks resources to enable them to accommodate experts in the organization, unlike large firms which have resources at their disposal to use. Due to this fact, owners or managers who assume the managing role have to do everything without following procedures and solve issues as they fall due. Also, Henchel (2008) found that practice of risk management to small businesses is not likely due to limited resources. He further claimed that large enterprises have what it take to operate within risk management standard practices. In short, SMEs decisions are done by unqualified personnel who rely on their instincts in most cases (Sparrow, 1999).

According to Janey and Dess (2006), SMEs are not going to practice a standard risk management because they have insufficient resources such as experts, technology, and access to finance. Also, Turpin (2002) claimed that SMEs in Europe have limited information on the market as well as personnel who hinder them from growing big. Furthermore, he found SMEs majority of them do not have plans and strategy for their operations.

Majority of small and medium enterprises lacks plans for risk management and the few which have plans they happen to be of poor quality in terms of systematic design. According to Henschel (2008) SMEs are exposed to risks due to unskilled personnel who are managing business since they have limited awareness of risk management subject. Sparrow (1999) contributed to this by his study findings, which found risk management practices in small business rely upon the owner of the businesses. Experiments further show the huge gap on risk management practices between SMEs and large enterprises due to their differences in terms of size, resources, management, and capital.

According to Muli (2003) Kenya insurance service misses an angle of understanding SMEs sector even though they practice risk management. Furthermore, his paper concluded and recommended that the sector have to fully utilize the information technology uses and its applicability in operations done. In the Muli’s study based on property risk management in Kenya, insurance industry was used as a case study.

Also, another study focused on helping small business entrepreneurs as well as the managers on operating their small and medium scale business whenever they get faced against the risks. The model explained what to be done in order to minimize property risks which may damage the business. The addressed way to handle disasters was insurance cover as well as a proper contingency plan for recovering purposes. Small and medium enterprises were given a helping hand on how to operate and survive even on critical hard situations. The study was on “strategic management of crises in small and medium businesses” by Mannin (2004).

Finally, Allan and Manning (2004) did a research in Australia on property risk management found that in order to secure properties of SMEs, insurance cover is vital. The research showed how important insurance is in events of uncertainty, thus SMEs will get a redemption chance of being re-installed to its position when it comes to the non-current assets such as machinery as well as plant, and buildings to those who own them. Therefore, through insurance SMEs have a surviving chance as well as growth opportunity even if exposed to property risks.

Conceptual Framework and Variables of the Study
The following conceptual framework figure was enabled by the literature review and the research questions of this study. The figure 2.1 shows the relationship among variables as follows:
Figure 2.1: The Conceptual Framework of the Study
Awareness
Risks faced
Management Techniques
Property Risk
Management
Risk
Management

Source: Figure Developed by the Author (2018).

The left part shows components related to risk management which contributes to the property risk management practices. It comprises of awareness of risks, risks faced, and techniques used to manage risks. While right position hypothesis shows the result which is risk management and finally the property risks management by which we can learn the practices.

For an enterprise, awareness of risk and risk management is important for risk management to be practiced. Effective risk management starts with identifying the risks faced and the knowledge of techniques for each specific risk faced.

Research Hypothesis
Variables and hypotheses came up through the theoretical, empirical review as well as from the conceptual framework set up. Thus, analysis of awareness, risks faced and techniques used to manage risks were used as independent variables while risk management and property risk management practices as the independent variable. Therefore, this study demonstrates the following hypotheses:
H1: Awareness related risk management as a source of property risks management practices.

H2: Risks faced and the risk management as a source of property risks management practices.

H3: Techniques used to manage risk related to risk management as a source of property risk practices.

Research Gap
The professional practice of property risk management by SMEs in Tanzania still faces a huge gap to be filled through integrating different sectors. Currently, the majority of SMEs do not practices professional property risk management. However, very few practice traditional risk management without understanding techniques of risk management. Yet, there are no enough attempts which address the issues since there are no satisfying statistics about SMEs which apply modern risks management. In short, large enterprises are the only ones which practice modern risk management in general. There is a need to address this gap in Tanzanian SMEs. Therefore, this study is going to look at the property risk management practices of small and medium enterprises in Tanzania; a case of retail shops in Kinondoni municipal. This will be done by providing knowledge to stakeholders and agents of SMEs as well as insurance sector in order to accomplish this goal.

CHAPTER III
RESEARCH METHODOLOGY
Overview
The following section demonstrates the methodology used in this paper. The research design, sample size, case study and the way data was collected as well as data processing and analysis.

Research methodology
The research problem is the force behind the study’s form. A study can have various forms according to the problem at hand. However, this study is the academic one which usually seeks explorations, descriptions, and or explanations (Zikimund, 2001). This study’s form is descriptive one which connects to the questions such as who, what, where, how. This kind of study ignores explaining what reasons forced such instance to happen (Robson, 1993).

The Research Design
A case study design was used in this paper. According to Malhotra (2012) a case study research is a search for knowledge in an experimental form which looks into current result from the environment. Moreover, the environment’s phenomenon has to be not obviously noticed by several manifests from various sources applied.

Study Area
The study will be conducted in Kinondoni municipal, Dar es Salaam. Different retail shops were used in this case study. This targeted area attracts more retailers because it is the municipal with higher income residents in the city (URT, 2003). Therefore, an adequate number of the respondents are expected to provide enough data and information.

Population and Sampling
Tanzania’s national census of 2012 showed that Dar es Salaam small and medium enterprises which are registered and the ones which are not registered are more than 12,000 (twelve thousand). This means all municipals such as Temeke, Ilala, and Kinondoni were being taken into account, before the introduction of new municipals; Ubungo and Kigamboni. But, this study only dealt with the small and medium enterprises (SMEs) which are in Kinondoni municipal.

The sample is the certain amount or number of subjects picked from the population and used for the purpose of giving information about the whole group (Kothari, 2004). Therefore, this study used only 100 SMEs in Kinondoni municipal.

Sampling techniques are strategies which help to get and use several samples that will be useful for the study (Zikimund, 2001). The respondents qualified for this study were selected by using purposive sampling procedure. Therefore, by doing so only required data for the study were selected (Adam and Kamuzora, 2008).

Types of Data and Data Collection
Primary data is original as well as new data which is gathered solely from a primary source (Kothari, 2004). Therefore, only primary data was used in this study.

Since this study used primary data, thus a survey method was used by a researcher. Also, an instrument of the structured questionnaire was used for data collection. The questionnaire has different ways for extracting data from respondents through a systematic prior set and tested question (Saunders, Lewis, and Thornhill, 2009). The questionnaire that was used by this study is attached in Appendix A1.

Data Analysis
Statistical Package for Social Science (SPSS) version 23 which is computer software mainly for research and statistics was used for enter, code, analyze data, and interpret them. Descriptive statistics was used for data analysis in order to give a general idea of how SMEs are affected with or without property risk management practices. Frequencies, percentages and crosstabs were of great use in analysis and finally, hypotheses testing.

Therefore, information is shown through graphs and tables. Furthermore, percentages and crosstabs present the degree of awareness, main risks faced and finally techniques of managing risks. In short, the study’s specific objectives were appreciated.

Reliability and Validity of the Study
When outcomes are stable and without changing over time as they will be applied to a different measurement are said to be reliable (Kothari, 2004). Pilot study was done in order to test the questionnaire if it is relevant and whether it would gather the required information. After that, the questionnaire was edited then deployed. Therefore, the information gathered is valid (Malhotra, 2012). Scale used is the one which has been used in various researches for the sake of proven reliability for this study.

CHAPTER IV
EMPIRICAL RESULTS AND INTERPRETATIONS
Overview
In this chapter we present and interpret analysis results of this study. Firstly, descriptive statistics is be used to assess the personal information of the respondents and SMEs information. Then, other results relevant to our research questions will be presented.

Descriptive Statistics
The study sample comprised of 100 retail shops which were selected by using purposeful sampling method. A total of 100 questionnaires were administered and they were all collected, coded, and cleaned. Then they were entered in SPSS 23 and analysed. The response rate of 70% and above from the respondents is excellent (Mugenda and Mugenda, 2003). Below is the assessment of respondent information.

Gender Distribution
The absence of gender biasness is determined by the percentage of 50/50 ideally. Due to the fact that most retail shops employ male rather than female workers, so the 50/50 percentage was not achieved. However, the descriptive statistics show the gender distribution of the respondents is 59.0% male and 41.0% female. Figure 4.1 shows gender distribution.

Source: Research Data Analysis (2018)
Age Distribution of the Respondents
The result shows that respondents of age group 18-28 were 36.0% of all respondents. Second group ranged 29-39 which were 41.0%. Third group 40-50 which were 16.0% of all respondents and finally the fourth group of all with age of 51 and above were 7.0%. This shows that most of the employees and owners of retail shops are under the age of 40 years.

Source: Research Data Analysis (2018)
Education Level of the Respondents
The results show that 7% of the respondents had primary education only and 57% attained secondary education. The remaining 36% had a tertiary education level. That means the majority of workers in the retail shops in Kinondoni municipal have a secondary education and followed by the tertiary education.

Source: Research Data Analysis (2018)
Position of the Respondent in the SME
The position of the respondents in the shops was found to be 32% owners, 12% managers and 56% employees. It was found that more retail shops in Kinondoni are operated by employees than by managers and owners. This could be because of the small size of the business that even an employee can run it with absence of higher supervision.

Source: Research Data Analysis (2018)
Shop Category
In this part different retail shops are categorized according to what goods or services they offer to the society. Retail shops that sold miscellaneous goods comprised of various goods other than hardware, clothes, and pharmacy. Miscellaneous shops were 41%, hardware shops made 17%, clothes were 19%, and finally pharmacy were 23%. Figure 4.5 below shows how the retail shops are distributed based on what they offer. Shops offering miscellaneous goods occupied a large portion compared to pharmacy, clothes and hardware shops.

Source: Research Data Analysis (2018)
SME Operating Time
Operating time of retail shops varies due to the time they have been established. So the retail shops which have been operating for 12 months or less were 1% of the sample, 1 to 3 years were 17%, 4 to 6 years were 21%, 7 to 9 years were 21%, and shops that operated for more than 10 years were 40%. This result means that more than 60% of shops in Kinondoni are experienced in the retail business with more than 7 years of operation. Figure 4.6 below presents the results.

Source: Research Data Analysis (2018)
Legal Structure of the Business
The legal structure of the surveyed retail shops is sole proprietorships by 47% of all shops, partnerships by 13%, and companies 40%. This shows how the distribution of ownership in the retail shops is more of sole proprietors than partnership and companies.

Source: Research Data Analysis (2018)
Awareness to Risk Management
This part begins with questions which wanted to know whether the respondents understand or do not understand the existence of risks. The results will be presented in cross tables across shop categories.
The table 4.1below presents the results which describe the respondents’ understanding about the root of risk management. Interestingly, the response shows that 100% of respondents they do understand risk existence so is its meaning. Therefore, proves that respondents have the basic knowledge about risks.

Table 4.1: Respondents Understanding of the Meaning of Risk
Understanding of Risk Miscellaneous Hardware Clothes Pharmacy Total
Yes 41 17 19 23 100
Total 41 17 19 23 100
Source: Research Data Analysis (2018)
The next question aimed at seeking respondents understanding of risk by mentioning three types of risks. About 26% of the respondents were unwilling to answer this question. Also about 74% of the respondents answered it. The majority of risk types which were mentioned fell into marketing risks, financial risks, property risks, personal risks, and only few on operational risks, liability risks and business risks.

When the respondents were asked to give a brief explanation as to what they understood about risk management, only 37% of respondents attempted to respond. Their explanations covered the major key words such as controlling risks, handling risks, fighting against risks, managing risks, and overcoming risks. The key words meant keeping the business from not failing.

Another question attempted to show risk management awareness on the scale of 1 to 5, where by 1=strongly disagree, 2=slightly disagree, 3=neutral, 4=slightly agree, and 5=strongly agree. Table 4.2 display responses from the statement “all large businesses face risks” showed 10% said neutral, 29% said slightly agree, and 61% said strongly agree. Therefore, 90% of respondents agreed if all large businesses face risks. This shows how respondents are aware of risks in business operations.

Table 4.2: All Large Businesses Face Risks
All large businesses face risks Miscellaneous Hardware Clothes Pharmacy Total
Neutral 7 o 3 0 10
Slightly agree 11 2 8 8 29
Strongly agree 23 15 8 15 61
Total 41 17 19 23 100
Source: Research Data Analysis (2018)
The statement that “Small businesses do not face risks” was responded in table 4.3 by 79% said strongly disagreed while 21% said slightly disagreed. Therefore, interestingly, all respondents disagreed that small business do not face risks. This outcome proves how respondents are aware of risks in their businesses since they all disagreed if small businesses do not face risks.

Table 4.3: Small Businesses do not Face Risks
Small business do not face risks Miscellaneous Hardware Clothes Pharmacy Total
Strongly disagree 34 15 14 16 79
Slightly disagree 7 2 5 7 21
Total 41 17 19 23 100
Source: Research Data Analysis (2018)
The statement “small businesses should not worry about risks” had76% of respondents who strongly disagreed, 23% of respondents who slightly disagreed, and 1% was neutral. The results show that, 99% of all respondents disagreed if the small businesses should not worry about risks. Therefore, results show how respondents are aware of the threats posed by risks to small businesses. Table 4.4 below show the results.

Table 4.4: Small Businesses Should not Worry about Risks
Small business should not worry about risks Miscellaneous Hardware Clothes Pharmacy Total
Strongly disagree 29 16 15 16 76
Slightly disagree 12 1 4 6 23
Neutral 0 0 0 1 1
Total 41 17 19 23 100
Source: Research Data Analysis (2018)
Statement “the matter of risks to any business is the responsibility of the government”. Results are illustrated in table 4.5. Responses were, 40% strongly disagree, 34% slightly disagree, 18% were neutral, 5% slightly agree, and 3% of respondents strongly agree. Therefore, this show that 74% of respondents are aware that the matter of risks to any business is not the government responsibility but theirs.

Table 4.5: Government is Responsible for Risk of Businesses
Government is responsible for risk of businesses Miscellaneous Hardware Clothes Pharmacy Total
Strongly disagree 15 7 6 12 40
Slightly disagree 13 6 6 9 34
Neutral 10 4 3 1 18
Slightly agree 3 0 1 1 5
Strongly agree 0 0 3 0 3
Total 41 17 19 23 100
Source: Research Data Analysis (2018)
The statement “I am prepared to manage risks facing my business” was responded according to the results in table 4.6. From 100 respondents, 14% slightly agree while 86% strongly agree. Hence, results displays that all respondents agreed to the statement posed. The respondents’ willingness of being prepared to manage risks shows the close connection of awareness to risk management.

Table 4.6: Preparedness to Manage My Business’ Risk
I am prepared to manage risks facing my business Miscellaneous Hardware Clothes Pharmacy Total
Slightly agree 7 0 5 2 14
Strongly agree 34 17 14 21 86
Total 41 17 19 23 100
Source: Research Data Analysis (2018)
“Risk management is crucial to small businesses in Tanzania”. The statement sought to establish whether SMEs players are aware of risk management significance to small businesses. The results are shown in table 4.7 as; out of 100% of respondents, 9% strongly disagree, 2% were neutral, 37% slightly agree, and 52% strongly agree. Thus, 89% of respondents agreed if risk management is crucial to small businesses in Tanzania while only 9% respondents disagreed slightly. The results show respondents’ awareness to the essential of risk management to SMEs in Tanzania.

Table 4.7: Risk Management is Crucial to Tanzania’s SMEs
Risk management is crucial to small businesses in Tanzania Miscellaneous Hardware Clothes Pharmacy Total
Slightly disagree 4 2 3 0 9
Neutral 0 0 1 1 2
Slightly agree 17 6 9 5 37
Strongly agree 20 9 6 17 52
Total 41 17 19 23 100
Source: Research Data Analysis (2018)
Most risks management practices in SMEs are unprofessional. The descriptions’ results are displayed in table 4.8. Results show 2% slightly disagree, 1% neutral, 19% slightly agree, and finally 78% who strongly agree. These responses are entirely an overwhelming since 97% agreed if most risk management practices in SMEs are unprofessional. So, this shows that respondents are aware of professional and unprofessional risks management practices.

Table 4.8: Most Risk Management Practices in SMEs are Unprofessional
Most risk management practices in SMEs are unprofessional Miscellaneous Hardware Clothes Pharmacy Total
Slightly disagree 1 0 1 0 2
Neutral 0 0 0 1 1
Slightly agree 8 2 5 4 19
Strongly agree 32 15 13 18 78
Total 41 17 19 23 100
Source: Research Data Analysis (2018)
Next description sought to understand the response whether professional risk management practices in SMEs is a waste of time. The responses are given in table 4.9 as shown below. It is interesting to observe that 28% strongly disagree, 25% slightly disagree, 24% were neutral, 20% slightly agree, and finally 3% strongly agree. From such responses it can be concluded that 53% respondents disagreed if professional risk management practices in SMEs is a waste of time. In short, the responses show if professional risk management practices in SMEs is worthy. Out of those who agreed and strongly agreed, more are from the pharmacy shops indicating the importance or risk management to them. This can follow from the value of their investments and ease of property destruction.

Table 4.9: Professional Risk Management and Time Wastage
Professional risk management practices in SMEs is a waste of time Miscellaneous Hardware Clothes Pharmacy Total
Strongly disagree 18 2 8 0 28
Slightly disagree 9 7 4 5 25
Neutral 8 4 3 9 24
Slightly agree 5 4 3 8 20
Strongly agree 1 0 1 1 3
Total 41 17 19 23 100
Source: Research Data Analysis (2018)
Finally, the last description on awareness to risk management seeks responses from the SMEs representative. The question posed was, professional risk management practices are too expensive for SMEs. The table 4.10 displays how respondents responded. Apparently, 3% strongly disagree, 6% slightly disagree, 11% were neutral, 39% slightly agree, and 41% strongly agree. So, the general responses shows that 80% respondents agreed if professional risk management practices are too expensive for SMEs. Out of those who agreed and strongly agreed, more are from the miscellaneous shops indicating they have limit of funds. The value of their investments limits them from applying professional risk management.

Table 4.10: Expensiveness of Professional Risk Management for SMEs
Professional risk management practices are too expensive for SMEs Miscellaneous Hardware Clothes Pharmacy Total
Strongly disagree 2 0 0 0 2
Slightly disagree 0 1 0 1 2
Neutral 8 6 6 2 22
Slightly agree 15 6 6 9 36
Strongly agree 16 4 7 11 38
Total 41 17 19 23 100
Source: Research Data Analysis (2018)
Property Risks Faced by Retail Shops
Based on 1 to 5 likert-scale, where by 1=not applicable, 2=not faced, 3=less faced, 4=moderate faced, and 5=most faced. Question with several descriptions sought responses from the respondents. Apparently, any likert-scale level which will not be displayed in tables, it simply means that scale is equal to 0%. Small and Medium Enterprises are faced with different risks, but this part is focused more on property risks mainly faced by retail shops.

Property defectiveness responses from respondents are displayed in table 4.11. Surprisingly, 1% said not faced. Other responses are 45% said less faced, 21% said moderate faced, and 33% said most faced. This response shows that 99% of retail shops face property defectiveness.

Table 4.11: Property Defectiveness Risk
Property defectiveness Miscellaneous Hardware Clothes Pharmacy Total
Not faced 1 0 0 0 1
Less faced 17 6 11 11 45
Moderate faced 10 3 3 5 21
Most faced 13 8 5 7 33
Total 41 17 19 23 100
Source: Research Data Analysis (2018)
Theft response is shown in table 4.12 as, 1% said it is not applicable, 26% said not faced, 54% said less faced, 14% said moderate faced, and 5% said most faced. As a conclusion, 73% of retail shops they mainly faced with theft risk of their properties.

Also, more hardware shops (16%) than clothes (4%) and pharmacies (11%) are less faced by theft risk. This can be explained by the fact that security in most hardware shops is high due to high value of properties inside… Also, most of the shops that are less faced by theft are miscellaneous goods shops (23%). This can be because of the small products value.

Table 4.12: Theft Risk
Theft risk Miscellaneous Hardware Clothes Pharmacy Total
Not applicable 1 0 0 0 1
Not faced 6 1 11 8 26
Less faced 23 16 4 11 54
Moderate faced 9 0 5 0 14
Most faced 2 0 3 0 5
Total 41 17 23 19 100
Source: Research Data Analysis (2018)
The table 4.13 below shows the responses on natural causes example wind, rain, and floods to retail shops as follows, 3% said not applicable, 39% said not faced, 35% said less faced, 12% said moderate faced, and 11% said most faced. Hence, 58% of retail shops agreed if they face natural cause.

Also, few hardware shops (1%) are affected or most faced by natural causes probably because their shops infrastructures are normally strong and their properties (goods) are not easily destroyed by factors such as wind or rain. More miscellaneous shops are most faced than the rest since they are always open for the public to see the goods while in clothes shops and pharmacies the commodities are normally kept secured behind the glass casing or glass doors.

Table 4.13: Risk of Natural Factors
Natural causes example (Floods, Wind, Rain) Miscellaneous Hardware Clothes Pharmacy Total
Not applicable 1 0 0 2 3
Not faced 10 7 7 16 40
Less faced 15 9 5 3 32
Moderate faced 8 0 4 0 12
Most faced 7 1 3 2 13
Total 41 17 19 23 100
Source: Research Data Analysis (2018)
Fire or electrical accidents which destroy or damage SME’s properties outcomes are shown in table 4.14. The results are 5% said not applicable, 77% said not faced, 7% said less faced, and finally 11% said moderate faced. Therefore, this outcome implies that 82% of retail shops are not faced with fire or electrical accidents. Also, most miscellaneous shops 33% are not faced or affected by fire or electrical accidents because they have strong property risk management of not consuming electric power extensively.

Table 4.14: Risk of Fire / Electrical accidents
Fire/ Electrical accidents which destroys or damage SME’s properties Miscellaneous Hardware Clothes Pharmacy Total
Not applicable 3 0 2 0 5
Not faced 33 16 12 16 77
Less faced 3 1 0 3 7
Moderate faced 2 0 5 4 11
Total 41 17 19 23 100
Source: Research Data Analysis (2018)
Riots results are displayed in table 4.15 as 17% said not applicable, 68% said not faced, 14% said less faced, and only 1% said moderate faced. So, by these results it is clearly seen that 85% of retail shops are not troubled by riots. Also, pharmacy shops as well as hardware shops are less not affected or less faced by riots because of the nature of their products and property risk management application such as security. Moreover, shops of miscellaneous goods retail shops are leading for being victims of riots as compared to any other shop category. This is because of their positioning in areas with large movement of people.

Table 4.15: Risk of Riots
Riots Miscellaneous Hardware Clothes Pharmacy Total
Not applicable 4 2 6 5 17
Not faced 26 14 10 18 68
Less faced 10 1 3 0 14
Moderate faced 1 0 0 0 1
Total 41 17 19 23 100
Source: Research Data Analysis (2018)
Finally, legal action such as demolition of business premises and legal action for failure to pay license fee responses in this part are shown in table 4.16. From the table below it is observed that 11% said not applicable, 39% said not faced, 41% said less faced, 3% said moderate faced, and lastly 6% said most faced. Thus, 50% of retail shops do not face legal action while other 50% of retail shops face legal actions.

Hardware and pharmacy shops are not at all affected moderately or mostly by legal actions because of their good property risk management. This is also contributed by the level of their investment and products which demands formal licenses at all time and failure to do so might keep you out of business.

Table 4.16: Risk of Legal Action
Legal action (Demolition of business premise, legal fee on license) Miscellaneous Hardware Clothes Pharmacy Total
Not applicable 3 2 1 5 11
Not faced 14 5 10 10 39
Less faced 20 10 3 8 41
Moderate faced 2 0 1 0 3
Most faced 2 0 4 0 6
Total 41 17 19 23 100
Source: Research Data Analysis (2018)
Risk Management Techniques
This is the final part of the questionnaires’ questions. It seeks to find out the common techniques used by retailers in managing property risks. Several property risks were posed to respondents so that they can give their responses towards them. Examples of those risk types posed are fire or electrical accidents, legal actions, defectiveness of commodities, theft, natural causes, and finally riots. Respondents were asked if they manage this risk types in a form of closed question of yes or no. If the response is yes, then the respondents were required to provide the measures which they use and the kind of challenges faced in managing the particular risk type. Ultimately, the researcher categorized such measure into a technique type it belongs. The techniques are categorized as avoidance, loss control, retention, non-insurance transfer, and insurance. Tables below present the results.

Fire/ electrical accidents which destroy or damage properties have the following outcomes as shown in table 4.17. Results are 81% said they commonly use loss control techniques such as fire extinguisher, or circuit breaker, and 19% said they use insurance. This show that to manage fire/ electrical accidents, loss control is mostly preferred compared to insurance. Also, in managing these risks retail shops encounter challenges such as cost of paying watchmen, watchmen disloyalties and insurance costs. The cost of insurance seems to be higher than loss control measures. Clothes retail shops are the last when it comes to employing insurance against fire or electrical accidents. This might be because of their small investment amount.

Table 4.17: Fire / Electrical Accidents which Destroys or Damage Properties
Fire/ Electrical accidents which destroys or damage properties Miscellaneous Hardware Clothes Pharmacy Total
Loss control 34 12 17 18 81
Insurance 7 5 2 5 19
Total 41 17 19 23 100
Source: Research Data Analysis (2018)
The responses from the legal actions are exhibited in table 4.18. Legal actions confront registered and unregistered retail shops. Thus, retail shops are required to pay license fees, fines and other legal requirements. Also, they are required to adhere all other terms and conditions stipulated by the authorities. From the table 4.18 it is observed that, 100% said they commonly use loss control techniques like payment on time of all legal requirements and abiding the rules, terms and conditions. However, they face challenges upon failure of adhering to legal actions they incur cost in terms of fines, penalties, corruptions and closing up of their shops until they satisfy all terms and conditions. Since insurance applies to accidental events, no shop can think about insurance as a technique of legal action.

Table 4.18: Risk Management Technique on Legal Action Risk
Legal action like (demolition of business premise, licenses payment) Miscellaneous Hardware Clothes Pharmacy Total
Loss control 41 17 19 23 100
Total 41 17 19 23 100
Source: Research Data Analysis (2018)
Defectiveness of commodities results are displayed in table 4.19. Whereby 85% said they commonly use loss control such as; salaries reduction to employee who have caused it, stock and store management, and pesticides, 8% said they use retention technique such as to display commodities which are not defected easily example woods and plastics, 7% said they use non insurance transfer technique such as warranties from their suppliers. Defectiveness of commodities is mainly caused by animals like rats since they destroy packed products by eating them. Therefore, loss control is commonly used by many respondents followed by retention, and non-insurance transfer techniques. However, the main challenge they face is cost in terms of power uses (LUKU uses increase) and commodities losing their face value. Also, clothes retail shops they completely not employ non insurance technique. This might be because of the nature of their products unlike other retail shops categories which employ this technique.

Table 4.19: Risk Management Technique on Defectiveness of Commodities Risk
Defectiveness of commodities Miscellaneous Hardware Clothes Pharmacy Total
Loss control 37 11 16 21 85
Retention 1 4 3 0 8
Non insurance transfer 3 2 0 2 7
Total 41 17 19 23 100
Source: Research Data Analysis (2018)
Techniques used by retailers in managing theft are presented in table 4.20. The results hold that, 87% said they commonly use loss control with measures like watchmen, being careful, security cameras, and community security, 10% said they commonly used retention example leaving bulk of woods out, and 3% said they commonly used insurance. In short, the most commonly used technique against theft is loss control followed by retention and lastly insurance. However, the challenges faced in doing so are cost and risk of products defecting in the long run.

Table 4.20: Risk Management Technique on Theft Risk
Thefts Miscellaneous Hardware Clothes Pharmacy Total
Loss control 33 15 16 23 87
Retention 5 2 3 0 10
Insurance 3 0 0 0 3
Total 41 17 19 23 100
Source: Research Data Analysis (2018)
Natural causes’ results are shown in table 4.21. There are 77% said they commonly used loss control technique such as keeping commodities in store, indoor pubs, aluminium and glass gates stay closed, and extension shades while 23% said they commonly used retention method with measure like displaying products which do not get defected easily by natural cause example plastics, iron poles, and woods. This show in managing natural cause risks such as floods, wind, and rain, loss control is leading technique followed by retention technique. However, retail shops face challenges like getting products out and then get them back inside, and products lose face value in the long run. Also, retention technique is mostly used by miscellaneous retail shops, hardware retail shops, and clothes retail shops. Pharmacy retail shops do not use this technique at all.

Table 4.21: Risk Management Technique on Natural Causes Risks
Natural causes for example, (Floods, Wind, Rain) Miscellaneous Hardware Clothes Pharmacy Total
Loss control 30 10 14 23 77
Retention 11 7 5 0 23
Total 41 17 19 23 100
Source: Research Data Analysis (2018)
This is the ultimate part of the questionnaire’s response seeking. It asked the respondents’ responses of riots risks. The table 4.22 below presents the results of which risk management techniques are commonly used. Data shows that, 97% said they use loss control with measures like closing of shop, watchmen, calling police, and ask for help from neighbours, and 3% said use insurance by paying for an insurance policy. As a conclusion, when it comes to managing riots risks, loss control techniques are mostly used than other techniques then finalized by insurance techniques. However, in doing so retail shops face challenges like cost of calling for help and losing customers. Few have used insurance and it could be due to high insurance costs to small businesses.

Also, 3% of miscellaneous shops use insurance which cover for risks from riots. However, no other retail shop category which employ such technique.

Table 4.22: Risk Management Technique on Riots Risks
Riots for example (Destruction from gun shots, stones) Miscellaneous Hardware Clothes Pharmacy Total
Loss control 38 17 19 23 97
Insurance 3 0 0 0 3
Total 41 17 19 23 100
Source: Research Data Analysis (2018)
Acceptance or Rejection of the Hypotheses
H1: Awareness related risk management as a source of property risks management practices. This is accepted based on the responses from the questionnaire’s questions 8, 9, 10, and 11.

H2: Risks faced and the risk management as a source of property risks management practices. This is accepted based on the responses from the questionnaire’s question 12.

H3: Techniques used to manage risk related to risk management as a source of property risk practices. This is also accepted based on the responses from questionnaire’s question 13.

CHAPTER V
DISCUSSION AND CONCLUSION
Overview
This chapter presents a summary of the findings, discussion, and conclusions. Moreover, this chapter presents recommendations, limitations of the study and areas for the further research.

Summary of the Findings
This study attempted to understand the property risk management practices of the small and medium enterprises (SMEs) in Tanzania. Specifically, the study aimed at achieving these; to evaluate the awareness of risk management among the SMEs in Tanzania, to understand main property risks faced by SMEs in Tanzania, and to understand risk management techniques of SMEs in Tanzania. Then the research questions were developed in order to be answered by the study. Sample size used was 100 retail shops picked by researcher through purposive sampling technique. Questionnaires and interview used for data collection then findings were analysed, presented and finally interpreted.

The interpretations show respondents from retail shops possesses high awareness level regardless of their education being secondary level for most of the respondents.

Also, the findings show that retail shops are faced with property risks in different percentages levels. For instance the most highly faced risks are property defectiveness 99%then follow theft 73%, natural causes 57%, and legal actions 50%. Also, small and medium enterprises are faced with fire or electrical accidents 18% and finally, riots 15%. The study found that hardware shops and pharmacies are less faced by theft risk since they employ high security measures. Also, more miscellaneous shops are most faced than the rest since they are always open for the public to see the goods while in clothes shops and pharmacies the commodities are normally kept secured behind the aluminium and glass casing or doors. Moreover, majority of miscellaneous shops are not faced or affected by fire or electrical accidents because they consume less electric power and they have better risk management. Hardware and pharmacy shops are not at all affected moderately or mostly by legal actions because of their good property risk management.

Finally, the findings showed measures, techniques commonly used to manage those property risks faced and the challenges involved in managing property risks. Loss control technique used averagely by 47.83%, retention technique by 4.67% averagely used, non-insurance technique by 4.00% averagely used, and finally, insurance technique by 3.33% averagely used. This shows that all of these techniques are only used up to 59.83% in total. Risk management techniques were not utilized for 40.17%. Insurance was the least used technique by all shops categories since it is too expensive for small businesses to afford.

Discussion
The study found that there is high awareness of risk management among the SMEs in Tanzania. Findings evidence showed 100% respondents understand the meaning of risk. Respondents mentioned risks like marketing risks, financial risks, property risks, personal risks, operational risks, liability risks, and business risks. Respondents also defined risk management with major key term like controlling risks, handling risks, fighting against risks, managing risks, and overcoming risks.

Some statements were responded as “all large businesses face risks” 90% respondents agreed, “Small businesses do not face risks” 100% respondents disagreed and “small businesses should not worry about risks” 99% respondents disagreed. Also, “the matter of risks to any business is the responsibility of the government” 74% respondents disagreed, “I am prepared managing risks facing my business” 100% respondents agreed, “risk management is crucial to SMEs in Tanzania” 89% respondents agreed, “most risk management practices in SMEs are unprofessional” 97% respondents agreed, “professional risk management practices in SMEs is a waste of time” 53% respondents disagreed, and finally, “professional risk management practices are too expensive for SMEs” 74% respondents agreed.

This might be because of experience, education, employee position, and age. Experience is evidenced by 61% of SMEs have been operating for more than 7 years. Also, responses from 64% respondents have age of more than 29 years old which shows they might have at least satisfying awareness of things including risk management. Moreover, responses from 68% respondents are employees including managers and normal employees whom have responsibilities of managing risks on behalf of the employers.

However, findings on education contradict with awareness since 64% of respondents do not have tertiary education.

This study is similar to the study by Mullan and Barbara (2013), Gheorghe (1993), and Gheorghe and Dan Vamanu (2005). Mullan and Barbara’s study was on “risk awareness measures”, Gheorghe’s study was on “Aftermath Risk Awareness, Perception, Assessment, and Communication”, and Gheorghe and Dan Vamanu’s study was on “Disaster Risk and Vulnerability Management from Awareness to Practice”. Also, it is related to the agency theory because agent’s awareness to risk management might enable risk management practices and vice versa is true.

On risks mainly faced by retail shops the study found that property defectiveness 99% faced, thefts 73% faced, natural causes 57% faced, and legal action 50% faced. Fire or electrical accidents 18% faced and riots 15% faced.

This might be because of unskilled personnel since 64% personnel in retail shops do not have a tertiary education. Lacking of skilled personnel exposes SMEs from all these property risks faced.

This study is similar to the study by Awesu (2014) and by Smit and Watkins (2012). Awesu’s study was on “investigation of risk management in small and micro enterprises: a case study of Mwanakwerekwe Zanzibar” and Smit and Watkins’s study was on “A literature review of small and medium enterprises (SME) risk management practices in South Africa”. Also, it is related to the new institutional economics theory because an enterprise is supposed to manage it risks.

Finally, on techniques commonly used to manage property risks, the study found that loss control technique was averagely used for 47.83%, retention technique was averagely used for 4.67%, non-insurance technique was averagely used for 4.00%, and insurance technique was averagely used for 3.33%.

This might be because of easiness of applicability as well as cost affordability in terms of loss control technique. However, small percentages use of retention technique, non-insurance technique, and insurance technique might be caused by limited education level of most SMEs operators as evidenced by 64% respondents have secondary and primary education only. Moreover, insurance technique is expensive to employ for majority of SMEs.

This study is similar to the study by Awesu (2014), Mudiyanselage and Jayathilake (2012), and Smit and Watkins (2012). Mudiyanselage and Jayathilake study’s was on “risk management practices in small and medium enterprises: evidence from Sri-Lanka”. Also, this study it is related to the enterprise risk management theory since it offers an enterprise process and techniques of controlling risks.

Conclusion
The general objective of this study was to attempt to understand the property risk management practices of the small and medium enterprises (SMEs) in Tanzania. Specifically, the study aimed at achieving these; to evaluate the awareness of risk management among the SMEs in Tanzania, to understand main property risks faced by SMEs in Tanzania, and to understand risk management techniques of SMEs in Tanzania.

To evaluate the awareness’s of risk management among the SMEs in Tanzania. The awareness evaluation questions were given to the respondents and the result showed a high level of awareness about risk management in their businesses.
To understand main property risks faced by SMEs in Tanzania. The main property risks faced by SMEs in Tanzania are property defectiveness, thefts, natural causes, and legal actions. Fire or electrical accidents’ and riots are faced to the very small extent compared to others. It can be concluded that SMEs are faced with the mentioned property risks.

Finally, to understand risk management techniques of SME’s in Tanzania. Technique used are, loss control, insurance, retention, and non-insurance. Thus, small and medium enterprises in Tanzania use loss control techniques to the large extent compared to any other technique. Also, technique such as retention, non-insurances, and insurance are less used and with no significant gap of uses among them.

Policy Implications
The results of this study imply the following to SMEs and the policy for SME development. Small and medium enterprises players should get more education and training on property risk management practices. By doing so, major players will understand the importance of applying professional or systematic risk management practices. The study also observed that SMEs cannot afford the cost of insurance as a risk management practice. Hence, insurance companies can be more engaged with the SMEs in order to come up with reasonable priced packages for SMEs. In achieving professional risk management education among SMEs and giving SMEs access to affordable insurance services, the government can have a role to play.

Limitations of the Study
The study had several limitations such as delayed in filling questionnaires due to busyness or lack of understanding English language of the respondents. Even though Swahili language questionnaires were supplied still the problem remained the same. As a result, the researcher decided to conduct questionnaire interview which helped to recover the whole sample size targeted. Also, limited time and funds was another limitation since the researcher was required to gather all the information by himself while covering all the cost involved.

Finally, some respondents were reluctant to fully cooperate because they thought the researcher was representing the government. However, the researcher had to disclose the university identification in order to clear the doubts.

Areas for the Further Studies
More research should be conducted in order to discover why avoidance technique was completely not the used technique. Also, further research should be conducted on property risk management practices of SMEs with a specific focus on miscellaneous retail shops, which are most in SMEs sector. Finally, further research should be conducted on risk management techniques’ cost differential estimations among SMEs.

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APPENDIX A1
Research Questionnaire543877517907009239251790700
UNIVERSITY OF DAR ES SALAAM
BUSINESS SCHOOL
DEPARTMENT OF GENERAL MANAGEMENT

Property Risk Management Practices of Small and Medium Enterprises in Tanzania:
A Case of Retail Shops in Kinondoni Municipal, Dar es Salaam.My name is Godlove N. Lambert a continuing student at the University of Dar es Salaam business school (UDBS). I am doing a research project on Property Risk Management Practices of Small and Medium Enterprises (SMEs) in Tanzania; a case of retail shops in Kinondoni municipal Dar es Salaam. This research is a partial fulfilment for Bachelor of Business Administration (BBA) in general management. You are among the chosen few to participate in the data collection of the study.

Kindly, respond to the attached questionnaire by filling in the spaces allocated with best degree of honest, knowledge as well as accuracy. Data which will be collected from you are strictly confidential with a unique purpose of only academic uses.

I would like to express my kind regards for your commitment to data provision.

QUESTIONNAIRE OF THE STUDY
PART A: PERSONAL INFORMATION OF THE RESPONDENT
Please tick the most correct answer.

1. What is your gender Male Female 2. What is your age group 18 –28 29–39 40–50 ? 51
3. What is your education level? Primary Secondary Tertiary
4. What is your position in this SME? Owner Manager Employee
PART B: SME INFORMATION
In which retail shop category is your business?
Miscellaneous Goods Hardware Clothes Pharmacy
6. For how long have you been operating? ? 12 Months 1–3 Years 4–6 Years 7–9 Years ?10 Years
7. What is the legal status of your SME? Sole Proprietorship Partnership Company PART C: AWARENESS TO RISK MANAGEMENT 8. Do you understand the meaning of the term risk? Yes No
If Yes, mention three types of risks that your business is facing
______________________ (ii)______________________ (iii) ________________________
Briefly, explain the meaning of risk management ___________________________________
______________________________________________________________________________
_______________________________
The following descriptions are meant to evaluate your awareness about risk management. According to scale of 5 to 1 kindly tick in the space you see best fits your view according to experience you possess. Where by 5=strongly agree, 4=slightly agree, 3=neutral, 2=slightly disagree and 1=strongly disagree. Please provide the highest degree of honest as possible.

Descriptions 5 4 3 2 1
All large businesses face risks Small businesses do not face risks Small businesses should not worry about risks The matter of risks to any business is the responsibility of the government I am prepared to manage risks facing my business Risk management is crucial to small businesses in Tanzania Most risks management practices in SMEs are unprofessional Professional risk management practices in SMEs is a waste of time Professional risk management practices are too expensive for SMEs Please show according to scale of 5 to 1 how the following risks are mainly faced by
Retailers’ shops where by 5=most faced, 4=moderate faced, 3=less faced, 2=not faced and 1=not applicable. Kindly be honest as possible.

Descriptions 5 4 3 2 1
Product Defectiveness

Theft of SMEs properties

Natural Causes example (Floods, Wind, Rain)

Fire / Electrical accidents which destroys or damage SME’s properties

Riots

Legal Action (Demolition of Business Premise)

On the next table, please fill in the empty spaces except the two coloured columns with the title TYPE. Kindly see the first example which guides you on how to answer. These questions examine which techniques are commonly used to manage property risks.

Risk Type Do you Measure 1 Type Measure 2 Type Challenges in
manage this Managing this
risk? Risk
Example: Theft Yes/ No Watchman Security Watchman
cameras Disloyalty, Cost
Fire / Electrical accidents which destroys or damage properties Legal Action for example, (Demolition of Business Premise) Defectiveness of Commodities from (Sunlight, Rain, Insects/Animals, Power cut) Theft Natural Causes for example, (Floods, Wind, Rain) Riots for example, (destruction from gun shots, stones) Thank you indeed for your involvement!

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