Paper Contents
Abstract
ABSTRACT Several risks make it increasingly difficult for microfinance banks (MFBs) in the Federal Capital Territory (FCT), Abuja, to achieve sustainability. This study investigates the influence of ERM to promote the sustainability of MFBs with an examination of the impacts of operational, regulatory, legal, and reputational risks in the sector, noting what is currently not knownregarding the drivers through which ERM is believed to create long-term viability within MFBs. The goal is to see howthese ERM benefits the stumbling blocks to sustainability are evaluated. It used a descriptive survey method and conducted structured interviews with 200 respondents, including senior management and risk officers from MFBs. The study used multiple regression analysis to examine the relationship between profitability and risk. The findings show that while operational risk has both positive and negative impacts on profitability, sustainability is positively affected by effective risk management and regulatory frameworks. Positive effects on profitability also stem from reputational riskmanagement. These findings underscore the need for robust internal controls, adherence to regulatory obligations,and commitment to reputational risk. This study opens up avenuesfor future studies on the impact of ERM practices in microfinance institutions and practical insights for MFB sustainability.Keywords: Reputational risk; regulatory and legal frameworks; operational risk; enterprise risk management; risk managementframeworks
Copyright
Copyright © 2025 Braimah, Eromosele Mohammed. This is an open access article distributed under the Creative Commons Attribution License.
