Challenges in financial risk management in SMEs: A practical perspective in Medellín

Abstract

Introduction: This research aimed to analyze whether SME managers consider financial risk within their administrative processes, and if so, what strategies they employ to mitigate it. Methodology: The study was conducted in two phases. In the first, a documentary and bibliographic review was conducted of authors who address financial risk in small and medium-sized enterprises. In the second phase, interviews were conducted with a representative sample of managers and administrators of micro, small, and medium-sized enterprises (MSMEs), with questions constructed from theoretical findings. Results: The results indicated that a significant proportion of entrepreneurs are unfamiliar with the concept of financial risk and its potential consequences. Furthermore, most do not implement preventive strategies to address it. Discussion: The lack of financial literacy and strategic planning among SME managers represents a critical vulnerability, which contributes to their high failure rate in the first years of operation. Conclusions: It is concluded that the lack of recognition and management of financial risk is a determining factor in the instability and early failure of SMEs. It is recommended to strengthen financial training and promote risk anticipation and mitigation tools.