This literature review, prepared for the MNG10720 unit, examines the risks associated with lending to individuals and Small and Medium Enterprises (SMEs) in Papua New Guinea (PNG). The report delves into the concept of risks, categorizing them into positive and negative impacts, and explores the process of lending within the PNG context. It highlights the challenges faced by individuals and SMEs in accessing loans, including issues like poor monitoring, unethical practices, and cybercrimes. The review further discusses risk management theories, such as the Barn Boehm Theory and the SoftRisk Risk Management Model, as well as a conceptual framework to address and mitigate these risks. The report concludes by summarizing the key findings and emphasizing the importance of effective risk management strategies, particularly for financial transactions in the region. The study includes references to relevant literature to support the analysis.
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