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Original research
ASSESSING THE EFFECTIVENESS OF INTERNAL RISK MANAGEMENT PRACTICES ON PROJECT PERFORMANCE: INSIGHTS FROM MALAWI’S NATIONAL ECONOMIC EMPOWERMENT FUNDPages 169-182
Abstract
Public microfinance institutions face high levels of operational risk, which is not always caused by borrower default. This study examines internal operational risk management practices and project performance at the National Economic Empowerment Fund (NEEF) in Malawi, which has incurred losses, with K206 billion still unrecovered in loans despite several reforms. A mixed-methods case study design, combined a nine-item risk management scale and a four-item performance scale with open-ended questions, was distributed to 66 NEEF employees. Both scales showed good reliability (α = 0.870 and 0.819). Pearson correlation (r = .626, p< .001) and regression analysis (R2 = .392, F (1,64) = 41.196, p< .001) shows a positive relationship. Explained variance 13.4-34.3% supported all six hypotheses. Thematic analysis identifies leading challenges, namely, weak credit appraisal (30.3%) and political interference (21.2%). Findings of the study indicate that the lack of performance at the institution comes from the inconsistent implementation rather than the lack of risk frameworks, extending ISO 31000:2018, ERM, and stakeholder theory to a public microfinance setting.
Keywords:
Economic empowerment fund,
Internal operational risk management,
Project performance,
Public microfinance,
Enterprise risk management,
Stakeholder theory.
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Stephen Maseko, 
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