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Abstract:
Over the years, enterprise-wide risk management has become a great concern for managers and board of directors who provide strategic leadership and governance oversight for organizations worldwide. In this regard, the study examined the impact of enterprise risk management practices on financial performance of rural and community banks in. Quantitative strategy was adopted via survey questionnaire to collect data from rural and community banks in Ghana. The study population was limited to rural and community banks in Ashanti Region of Ghana. Both primary and secondary data were used for the study. Seventy - Five (75) questionnaires were administered to respondents of 25 rural and community banks sampled for the study using purposive sampling. The data collected was analyzed using SPSS and Pearson Correlation analysis. The analyses revealed that there was positive linear correlation between enterprise risk management and financial performance indicators of leverage, asset quality and liquidity. On the other hand, the analysis also revealed that there is negative weak linear relationship between enterprise risk management and financial performance indicators of return on asset and asset turnover. Furthermore, the finding of the study also revealed that there is strong positive relationship between enterprise risk management practices and overall financial performance of rural and community banks.
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