Factors Influencing the Growth of Small and Medium Enterprises (SMEs) in Afghanistan: A Case Study of Parwan Province

Mohammad Mahfoz  Faqiri; Mohammad Omar Lutfy; Mohammad Faisal  Neizi

doi:10.47175/rissj.v6i4.1231

Mohammad Mahfoz Faqiri B.B.A department of economic faculty, Parwan University
Mohammad Omar Lutfy Finance and Banking department of economic faculty, Parwan University
Mohammad Faisal Neizi B.B.A department of economic faculty, Parwan University

DOI: https://doi.org/10.47175/rissj.v6i4.1231

Keywords: Economic growth, factor analysis, Parwan Province, Small and Medium Enterprises (SMEs)

Abstract

Small and Medium Enterprises (SMEs) serve as pivotal engines of sustainable economic development, employment generation, and innovation diffusion. Their lean organizational structures, operational flexibility, and relatively low capital requirements render them highly effective in poverty alleviation and social empowerment. In Afghanistan, promoting SME growth constitutes a strategic pathway for economic reconstruction and societal resilience. This study employs a descriptive-survey design to investigate the key determinants of SME expansion in Parwan province. Data were collected from 322 active enterprises and analyzed through Exploratory Factor Analysis (EFA). The results highlight eight principal growth drivers: innovation and production productivity, workforce competencies, institutional support and legal framework, managerial and leadership capabilities, technological and logistical infrastructure, financial performance and management, human capital and technological capacity, and preparedness for external competition. Targeted enhancement of these factors can equip policymakers with actionable insights to formulate evidence-based strategies, fostering sustainable and resilient SME driven economic growth in the region.

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