Recent Findings in Risk Management Described by a Researcher from Dar Al-Hekma University (Risk Sharing, SMEs’ Financial Strategy, and Lending Guarantee Technology): Insurance – Risk Management

2023 FEB 23 (NewsRx) -- By a News Reporter-Staff News Editor at Insurance Daily News -- Research findings on risk management are discussed in a new report. According to news originating from Jeddah, Saudi Arabia, by NewsRx correspondents, research stated, “Several governments use the Credit Guarantee Schemes to ease SMEs’ access to funding and support their growth and survival.”

Funders for this research include Vice Presidency For Graduate Studies, Business And Scientific Research.

The news correspondents obtained a quote from the research from Dar Al-Hekma University: “This paper suggests a lending guarantee technology based on risk sharing through a de facto shareholding agreement to cover potential losses and reduce the premature default risk. The simulation of a typical entrepreneurial experiment shows that the key SMEs dynamics (value creation, profitability, risk, leverage, and equity multiplier, among others) and other related financial additionality and sustainability indicators are substantially improved.”

According to the news reporters, the research concluded: “The ideal financial strategy for the SMEs’ entrepreneurs is to keep lower levels of the equity multiplier to transmit positive signals to the market, which improves the business prospects and related creditworthiness. The results indicate that risk sharing alleviates the financiers’ reluctance to increase the SMEs funding and improve their risk management systems.”

For more information on this research see: Risk Sharing, SMEs’ Financial Strategy, and Lending Guarantee Technology. Risks, 2023,11(2). (Risks - http://www.mdpi.com/journal/risks). The publisher for Risks is MDPI AG.

A free version of this journal article is available at https://doi.org/10.3390/risks11020033.

Our news editors report that more information may be obtained by contacting Karima Saci, Banking and Finance Department, Dar Al-Hekma University, Jeddah 22246-4872, Saudi Arabia. Additional authors for this research include Walid Mansour.

(Our reports deliver fact-based news of research and discoveries from around the world.)