Open AccessEnterprise Risk Management Implementation of Financial Institutions in Ethiopia
Author(s) -
Tamiru Negi Tsige*,
Ravi Singla
Publication year - 2019
Publication title -
international journal of innovative technology and exploring engineering
Language(s) - English
Resource type - Journals
ISSN - 2278-3075
DOI - 10.35940/ijitee.b7842.129219
Subject(s) - respondent , descriptive statistics , business , pie chart , nonprobability sampling , sample (material) , financial management , risk management , work (physics) , population , enterprise risk management , finance , accounting , data collection , order (exchange) , engineering , political science , mechanical engineering , statistics , chemistry , demography , mathematics , chromatography , sociology , law
Recently, even though, more emphasis is given to enterprise risk management (ERM) worldwide to manage risks, there is scant knowledge and empirical evidence on ERM implementation of financial institutions in Ethiopia as there are only limited research works or literature related to ERM trends in Ethiopia. Thus, the main objective of this study was to assess the enterprise risk management implementation of financial institutions in Ethiopia. This study adopted a descriptive research design. In order to obtain relevant data for the study, both primary and secondary data sources were employed. The primary data were gathered through questionnaires while secondary data were extracted from different relevant sources such as books, journals, and websites. The population of the study was the entire banks and insurance companies in Ethiopia. At the time of the survey, there were 35 financial institutions (18 banks and 17 insurance companies) registered with the National Bank of Ethiopia and operating in Ethiopia. The unit of analysis were these institutions’ headquarter office chief risk officers, chief financial officers, senior managers, technical staff of risk management units and other employees whose work is related to risk management in each of the selected institutions. The sample responds were selected using a purposive sampling technique and a total number of sample respondent were 180. The data collected was analyzed and presented using descriptive statistics and the results were presented using pie charts, tables, and graphs. The results of the analyses revealed that the majority of the financial institutions in Ethiopia involved in the survey have a formal ERM in place even though the extent of ERM adoption varies from institution to institution. However, the results of the analysis show that ERM implementation level is low and in its infant stage in financial institutions in Ethiopia and these financial institutions have also less developed ERM practices than international organizations.