The assignment, “Study on Identification of Risk Factors Affecting Sub-Sectors’ Enterprises and Development of a Risk Mitigation Matrix,” was implemented under the Sustainable Enterprise Project (SEP), a joint initiative by PKSF and the World Bank. The primary objective was to enhance the resilience and sustainability of microenterprises in Bangladesh by identifying, analyzing, and mitigating risks that hinder their operations and growth.

The study focused on 16 sub-sectors across agribusiness and manufacturing, covering 17 districts. These sectors, vital to local and national economies, face a multitude of challenges, including financial constraints, operational inefficiencies, environmental impacts, and market-related risks. The study aimed to develop a comprehensive risk management framework tailored to these specific sub-sectors.

Sectors and Sub-Sectors under the study included:

Broad Sector 1-Manufacturing:

• -Leather processing and shoemaking: Leather products (belt) and shoemaking.
• -Mini textile: Hosiery, Mini garments.
• -Light engineering: Machinery and equipment.
• -Food processing: Street food, Salt processing and trade, Dry fish processing, Rice mill.
• -Metal work: Imitation jewelry.

Broad Sector 2-Agribusiness:

• -Livestock: Beef fattening, Dairy farm, Buffalo rearing.
• -Horticulture: Vegetables, Mango.
• -Aquaculture: Pisciculture.
• -Poultry: Poultry farm.

The broad objective of the study was to identify and prioritize sectoral risk factors affecting the sub sectors’ enterprises and drawing matrix to mitigate risk to survive enterprises. Besides, the study aimed to fulfil the following specific objectives:

• -To identify and prioritize agricultural and manufacturing risks and risk management gaps and needs;
• -To estimate the likelihood of risk events occurring together with the socio-economic and environmental impacts;
• -To develop a comprehensive sectoral risk mitigation and response planning matrix;
• -To develop risk tracking, controlling and reporting matrix, and guideline to implement the tools

The scope of the study included, but were not limited to,

Plan Risk Management (PRM):

• -Define processes for conducting risk management activities for sub-sectors.
• -Develop a risk management plan outlining risk strategy, methodology, roles and responsibilities, funding sources, timing, and sub-sector-specific risk breakdown structures.
• -Define risk probabilities and impacts in the project context, reflecting organizational and stakeholder risk thresholds.
• -Create a probability and impact matrix to evaluate the priority of individual risks.
• -Develop risk reporting and tracking formats, including risk registers and reports.

Identify Risks:

• -Review project management plans, documents, agreements, procurement records, enterprise environmental factors, and organizational process assets.
• -Collect data using techniques like brainstorming, checklists, and interviews.
• -Perform data analyses such as root-cause, assumption and constraint analysis, SWOT, and document analysis to identify risks.
• -Prepare prompt lists to guide risk identification using frameworks like PESTLE (Political, Economic, Social, Technological, Legal, Environmental) or TECOP (Technical, Environmental, Commercial, Operational, Political).

Perform Qualitative Risk Analysis:

• -Assess and prioritize identified risks based on their probability of occurrence and impact on project objectives.
• -Evaluate risk data quality to ensure accuracy and reliability for analysis.
• -Conduct probability and impact assessments for risks, considering effects on schedule, cost, quality, or performance.
• -Develop a probability and impact matrix to map and evaluate risks.

Plan Risk Responses:

• -Develop options, select strategies, and agree on actions to address overall sectoral risks and individual sub-sector risks.
• -Suggest updates to schedule, cost, quality, resource, and procurement management plans.

Implement Risk Responses:

• -Prepare sub-sector-specific risk response plans for project implementation.

Monitor Risks:

• -Develop sub-sector-specific risk registers for monitoring and reporting.
• -Track implementation of risk response plans and analyze emerging risks.

Evaluate the effectiveness of risk management processes throughout the project lifecycle.

Key Highlights of the Assignment

The team delivered the following services to meet the project’s objectives:

1.Project Planning and Coordination

• -Conducted initial consultations with PKSF and stakeholders to align on objectives and scope.
• -Developed a detailed inception report outlining the methodology, work plan, and deliverables.

2.Risk Identification and Assessment

• Reviewed secondary documents, including policies, project plans, and research articles, to identify existing risk factors.
• Conducted 34 Key Informant Interviews (KIIs) with representatives from government ministries, financial institutions, and enterprise support organizations.
• Facilitated 9 Focus Group Discussions (FGDs) with microenterprise employees to understand on-ground challenges and risks.
• Undertook on-site microenterprise interviews (600 in total) to gather sector-specific data from value chain actors.

3.Data Analysis

• Utilized the ERP Risk Analysis Framework to classify risks into threats (gaps) and opportunities (needs).
• Generated risk heatmaps to visualize the likelihood and impact of identified risks.
• Conducted thematic coding and triangulation of qualitative data to ensure reliability and comprehensiveness.

4.Development of Risk Mitigation Strategies

• Designed a Risk Mitigation and Response Matrix, detailing actionable strategies for each identified risk.
• Proposed contingency plans, responsible actors, and timelines for implementation.
• Integrated environmental and socio-economic considerations into the mitigation strategies.

5.Monitoring and Evaluation Tools

• Developed tools for risk tracking and reporting, including risk registers and monitoring templates.
• Prepared guidelines for implementing and sustaining risk management practices.

6.Capacity Building

• Trained data collectors and field staff on using tools such as KoboToolbox for efficient data collection and reporting.
• Prepared guidelines for and trained PKSF staff and other stakeholders on utilizing the risk management framework effectively.

7.Stakeholder Engagement and Dissemination

• Organized workshops to present draft findings and gather feedback from stakeholders.
• Incorporated stakeholder inputs into the final risk assessment report and mitigation matrix.

8.Final Deliverables

• Submitted a comprehensive risk assessment report, including sector-wise findings, risk matrices, and policy recommendations.
• Delivered actionable tools and guidelines for risk monitoring and management.
• Presented key findings and recommendations to PKSF and the World Bank in a formal workshop.
• Prepared risk register and trained PKSF staff and other stakeholders in a national workshop.