Advanced Journal of Management, Humanity and Social Science

Abstract This study examines the impact of microfinance services on the financial sustainability and performance of medium-sized enterprises (SMEs) in Mazar-e-Sharif, Afghanistan, using data from 100 firms selected through systematic random sampling. The primary objective is to assess how microcredit access, savings services, and entrepreneurial development training affect return on assets (ROA) and financial sustainability (FS), while controlling for firm age and size. Data were collected via structured questionnaires administered to SME owners/managers, with reliability confirmed by Cronbach's alpha of 0.780 (N=100 items) and content validity established through review by 10 Afghan microfinance experts. Analysis employed descriptive statistics, Pearson correlation matrices, and multiple linear regression models following established SME research methodologies. The first regression model revealed that internal finance (β=0.012, t=10.78, p<0.001) and trade credit (β=0.008, t=7.23, p<0.001) significantly enhance ROA (R²=0.61, F=24.37, p<0.001), while non-institutional finance shows a negative effect (β=-0.130, p=0.017). The second model demonstrated strong positive impacts of microcredit (β=0.287, t=5.02, p<0.001), savings services (β=0.214, t=3.67, p=0.01), and entrepreneurial training (β=0.176, t=3.11, p=0.002) on financial sustainability (R²=0.65, Adj. R²=0.62, F=28.45, p<0.001), with larger/younger firms benefiting most. Nine of ten hypotheses were supported, underscoring microfinance's comprehensive role (financial + non-financial services) in fragile economies. Policy recommendations include government investment in energy infrastructure, transportation networks, and SME training programs to enhance competitiveness. These findings offer actionable insights for post-conflict development strategies.

Abstract This study investigates how intellectual capital influences the performance of financial institutions in Balkh province, Afghanistan, emphasizing its role as a core intangible asset that drives value creation in modern organizations. Intellectual capital, based on the model of Caba and Sierra (2001), is examined through its three key components—human capital, structural capital, and relational capital. Data were collected from 120 licensed money exchangers and private commercial banks in Mazar-e-Sharif using a structured questionnaire measured on a five-point Likert scale, and the analysis was conducted using descriptive statistics and optimal scaling regression in SPSS. The results indicate that intellectual capital substantially contributes to institutional performance, with an R² value of 0.63, demonstrating that the examined variables account for 63% of performance variance. Within human capital, five indicators show significant influence, highlighting the importance of employee creativity, professional competencies, training, dynamism, and overall operational capability. In structural capital, two indicators—organizational research and development capacity and operational efficiency—emerge as meaningful contributors to performance. Relational capital also proves relevant, with communication quality with customers and suppliers showing significant positive effects. Overall, the findings confirm that human, structural, and relational capital collectively shape the performance of financial institutions in Balkh, with human capital exerting the strongest influence. These results underscore the need for financial institutions in Afghanistan to prioritize the development, management, and continuous enhancement of intangible assets to improve competitiveness, service delivery, and long-term organizational sustainability.

Abstract This study examines the effect of financial risk management practices on the financial performance of steel milling companies operating in Afghanistan. Using a quantitative, explanatory research design, primary data were collected from 32 finance-related staff across five steel companies through a structured Likert-scale questionnaire, while secondary financial data were obtained from audited statements to compute return on assets (ROA). Descriptive statistics, Pearson correlation analysis, and multiple linear regression were employed to evaluate the relationships between financial performance and four dimensions of financial risk management: understanding of risk and risk management, risk identification, risk analysis and assessment, and risk monitoring. The findings reveal that all four dimensions exhibit positive and statistically significant effects on ROA, indicating that firms with stronger and more structured risk-management systems achieve higher profitability. The regression model explains 84.3% of the variation in financial performance, demonstrating substantial predictive power. While firm size and capital structure show positive but statistically insignificant effects, the results emphasize that managerial capability in applying risk-management practices outweighs structural firm characteristics in determining profitability. The study concludes that effective financial risk management is essential for enhancing financial performance in Afghanistan’s steel industry, which operates within a highly volatile and uncertain environment. Strengthening internal controls, broadening risk-identification processes, and improving monitoring systems are recommended to support long-term financial sustainability.