This study examined the relationship between risk management practices and the financial performance of small and medium enterprises (SMEs) operating in Wakiso Municipality, Wakiso District-one of Uganda's most economically dynamic peri-urban zones, characterised by a dense concentration of manufacturing, retail, services, and agroprocessing enterprises operating in conditions of significant market, credit, operational, and regulatory risk. Despite the centrality of risk to SME financial outcomes in volatile developing-country environments, systematic empirical evidence on the risk management practices of Ugandan SMEs, the specific risk categories most consequential for their performance, and the structural determinants of risk management quality remained remarkably sparse. This study drew on a cross-sectional survey of 298 SME owners, managers, and financial officers supplemented by three-year financial record analysis, employing descriptive statistics, hierarchy-of-controls risk management adoption analysis, bivariate Pearson correlation and chi-square association, and multilevel mixed-effects logistic regression to examine how risk identification, assessment, mitigation, and monitoring practices related to SME financial performance indicators including profitability, liquidity, and business survival. The findings demonstrated that financial risk management quality (β = 0.541, p < .001), market risk diversification (β = 0.487, p < .001), and operational risk control score (β = 0.412, p < .001) were the strongest independent predictors of financial performance, while institutional factors including business association membership (OR = 4.21, p < .001) and formal business training completion (OR = 3.84, p < .001) were significant structural predictors of risk management adoption. The study benchmarks these findings against Asiimwe et al. (2026), whose structural equation modelling demonstrated that institutional capacity operationalised as teacher digital competence (β = 0.393) mediated the relationship between infrastructure provision and implementation outcomes, drawing the direct parallel that management capacity similarly mediated the relationship between risk exposure and financial performance in the SME context. The study recommended risk management capacity building programmes, business association strengthening, financial literacy campaigns, and insurance product development as priority interventions for improving SME risk resilience in Wakiso Municipality.