Disaster as Business Risk in SME: An Exploratory Study

Abstract

The concept of business risk has been extended to several new concepts. Disaster, disease, social unrest and terrorism are emerging as part of business risks. This study aim is to explore classification of disaster risk in micro, small and medium enterprises (MSME). This study explains factors and risk perception of disaster prevention and reduction. The study based on survey, which involved 315 MSMEs, focus group discussion and in-depth interview with several key informants. We use content analysis as a basic tool in the data analysis process, with descriptive statistic to complete information findings in the study. Unit analysis of this study are MSME industries, they are batik and textile, furniture and handy-craft and food industry. The result shows that they are interconnectedness between financial institution, local governance and MSME in the disaster risk management model. Each party has obligations in conducting preparedness of disaster and risk protection procedures for disaster risk management. We also find that there is still very low risk perception among MSME in Surakarta. This could be a potential problem when the disaster risk management should be implemented in MSME business.

The Assessment of Non-Financial Risk Sources of SMES in the V4 Countries and Serbia

“…Because of globalization and a rapidly changing market environment, businesses must face new forms of business risk [17] as without risk, there would be no motivation to conduct business [18]. Setyawan et al [19] state that the traditional concept of risks has been extended to several new concepts. Disaster, terrorism, catastrophic expenditure, and corruption are now included among business risks [20].The economic and social environment in a country is a major contributor of risks and can determine some sources of risks.…”

Continuous flood risk reduction on MSMEs: Implementation of MACTOR program

“…Micro, Small and Medium Enterprises (MSMEs) have a vital role in supporting the economic growth in which their number has reached 56.54 million units or approximately 99.99% of the total business actors in Indonesia. They contribute about 60% of GDP and provide a significant amount of employment (Setyawan et al, 2018). Nevertheless, they are the most affected units in case there is a hazard.…”

“…Central Java Province is one of the provinces with high vulnerability to flooding (BNPB, 2016) and Klaten Regency is one of the most flood-prone areas in Central Java Province (BNPB, 2016;. In 2011In -2015 floods with major impacts were recorded, including one victim died, 2,094 people were evacuated, seven houses and 605 ha were heavily damaged (BNPB, 2016) The main risk of flood for MSMEs is the damage in production equipment and production site (Setyawan et al, 2018). The production site is usually integrated into the settlement; hence the priority of protecting the production site is simultaneous with protecting the residence.…”

“…The flood risk reduction efforts for MSMEs have not been optimal. The issues related to flood risk reduction are very complex such as weak governance (Setyawan et al, 2018;Subarudi, 2008) and high vulnerability (Isa, 2016;Margono et al, 2014). This study aims at analyzing the vulnerability of MSMEs in Klaten Regency, Central Java, Indonesia, identifying stakeholders involved in existing institutions, analyzing the significance and influence of stakeholders in flood risk reduction, and analyzing the relationships among stakeholders in flood risk reduction.…”

Flood Risk Reduction Model on Small Medium Enterprises

“…Nevertheless, they are the most affected units in case there is a hazard. The The First ELEHIC shortage in risk analysis and the complexity of post-disaster recovery are some major issues for them [1][2].…”