Enhancing LLMs with Context-Specific Knowledge for Mitigating Misinformation in SMEs: A RAG-based Modeling and Analysis

Large Language Models (LLMs), a part of artificial intelligence (AI), are increasingly being adopted by Small and Medium Enterprises (SMEs) to enhance question-answering capabilities and support business decision-making processes. However, hallucinations in LLM-generated outputs can serve as a source of misinformation, reducing user confidence in their reliability and trustworthiness within SMEs. Retrieval-Augmented Generation (RAG) has emerged as a promising approach to address this challenge by incorporating external knowledge sources into the modeling process. In this paper, we present VectorRAG and GraphRAG modeling approaches to mitigate hallucinations and misinformation risks and evaluate their effectiveness in SME environments. Our experimental evaluation is conducted on multiple state-of-the-art LLMs, including LLaMA, Mistral, and Qwen, to assess performance in terms of useful response generation, risk of hallucination, contextual relevance, as well as human-interpretation. The results demonstrate that RAG-enhanced LLMs can significantly improve response quality by reducing hallucinations and misinformation, thereby supporting more reliable, trustworthy, and context-aware decision-making in SME environments.