32 BUSINESS RISK MANAGEMENT AND ORGANISATIONAL PERFORMANCE: EMPIRICAL EVIDENCE FROM SMALL AND MEDIUM ENTERPRISES (SMEs) IN NIGERIA Folake Olowokudejo Fisayo, Samson Ifejionu Nwankwo Abstract: Risks can have adverse consequence of business organizations particularly SMEs. This research therefore looked at the relationship between risk management practices and its effect on organizational performance of SMEs in the metropolis of Lagos. The survey design for this study was descriptive in nature. The research instrument for data gathering was interview schedule. The sample population is consisted of 58 respondents. The findings from the study thus revealed that there was no structured means for managing their risks and that the knowledge of individuals does not really apply in their risk management practice. The study recommends that Insurance companies should endeavour to increase insurance awareness among small and medium business opertaors; and also design packaged or combined policies that will cover a broad spectrum of losses that is suffered by SMEs such as fire, flood, and theft. Also, SMEs operators should endeavor to develop a culture of managing their risks. Keywords: Risk, Risk management practice, SMEs Practice, Organizational Performance 1. Introduction Recent studies show that small and medium enterprises development is closely linked with growth (Beck et al 2005) as well as jobs creation. This is so because of the numerous advantages which small and medium enterprises have over large establishments, advantages which include quick responsiveness to customer’s needs; flexibility; innovativeness; and the ability to adapt product offering to customers’ needs (Oya et al., 2011; Islam and Des, 2012; Gbandi and Amissah2014) Several other reasons have being given for encouraging small and medium enterprises which include the need of government to urgently create employment opportunities for their citizens which is also to be treated as an important programme in the government’s policy. As well as the need to empower her citizens particularly in developing countries with some level of technology and entrepreneurial skill (Onugu,2005; Fashola, 2013); stem rural –urban migration (Onugu, 2005; Gulani and Aisha, 2013; Duru and Lawal, 2012; Duarte, 2004). Studies by IFCshow that approximately 96% of Nigerian Businesses are SMEs compared to 53% in U.S.A. and 65% in Europe. This study also gave the number of manufacturing industrial sector that are SMEs at 90% and the contribution of SMEs to GDP at 1% compared to 40% in Asian Countries and 50% in the U.S.A and Europe (Oyeyinka, 2010).SMEs have being used as agent to foster a community’s economic development, enterprise development and locality development (Duarte, 2004) Small and medium enterprises have not performed well in Nigeria and thus have not contributed much to the economic growth and development of Nigeria. A situation that