Access to Microcredit and Profit Growth Among Women-Run SMEs in the Southwestern Zone of Afghanistan
Keywords:
Women entrepreneurs, Microcredit, Profit growth, SMEs, Financial inclusion, Capacity-building, AfghanistanAbstract
Purpose: This study examines the influence of microcredit accessibility, loan attributes, and business support services on profit expansion among women-owned small and medium enterprises (SMEs) in Kandahar, Afghanistan. Its objective is to identify critical financial and managerial factors that facilitate women entrepreneurs in scaling their businesses within a post-conflict environment.
Method: A cross-sectional survey was carried out among 327 women SME owners from five provinces of Southwestern zone of Afghanistan. Binary logistic regression was used to analyse the likelihood of achieving at least 20% profit growth over the past 12 months, based on variables such as microcredit access, loan size, repayment burden, business training.
Results: The results indicate that access to microcredit more than doubles the likelihood of achieving profit growth (p < 0.01; Exp(B) > 2). Larger loan amounts were significantly associated with higher profit growth (p < 0.01), while heavier repayment burdens decreased the probability of growth (p < 0.01). Furthermore, participation in business training was strongly correlated with enhanced business performance (p < 0.01).
Practical Implications: Combining microfinance with managerial training and financial literacy support can significantly improve the profitability of women-run SMEs. Policymakers and development organisations should prioritise such comprehensive approaches to optimise entrepreneurial outcomes.
Originality/Novelty: This study offers new empirical evidence from a fragile, under-researched setting, showing how financial and non-financial services together affect women’s entrepreneurial success. It adds to the limited existing literature on gender, microfinance, and SME performance in post-conflict economies.
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