FINANCIAL RISK MANAGEMENT AND FINANCIAL PERFORMANCE OF RELIGIOUS HEALTH INSTITUTIONS IN MALAWI

Abstract

The investigation examined how Financial Risk Management (FRM) practices shape the financial outcomes of religious health facilities in Malawi, highlighting the specific contribution of liquidity risk oversight. A descriptive research framework was employed, relying principally on quantitative evidence. A complete census was performed with the 23 hospitals under the purview of the Christian Health Association of Malawi. Data collection involved structured questionnaires for primary input, complemented by data collection sheets for capturing key financial performance figures. Following collection, the datasets underwent descriptive statistical evaluation and multiple regression analysis, allowing for an assessment of the effect of defined liquidity risk strategies on the financial performance of the sector. Primary data arrived through the administration of structured questionnaires, with accompanying secondary records created by transcribing completed survey forms. Both datasets were then processed using descriptive statistical techniques and regression analysis. A multivariate regression model was deployed to delineate the contribution of liquidity and selected dimensions of FRM to the performance indicators of Religious Health Institutions (RHIs) under study. The data clearly show that how well the surveyed RHIs handle liquidity risk is positively linked—both statistically and economically  to their overall financial performance. The empirical findings indicate a statistically positive and economically meaningful association between the management of liquidity risk and the financial success of the surveyed RHIs. The extant literature, therefore, recommends that Malawian RHIs adopt a comprehensive approach to FRM; Council for Health and Medical (CHAM) should formulate and disseminate policies designed to facilitate the progressive institutionalization of FRM, while each individual RHI is urged to allocate the requisite financial and human resources to effectuate the FRM framework proposed by CHAM.