Small and Medium Enterprises (SMEs) form the backbone of Afghanistan's private sector, contributing substantially to employment generation, income creation, and innovation. Despite their pivotal role, these enterprises operate in an environment fraught with challenges - ranging from limited access to capital and markets to inadequate infrastructure and political instability. In particular, Afghan SMEs have historically struggled to modernize their operations due to a lack of access to affordable technology and low levels of digital literacy. Globally, technological innovation has transformed how small businesses operate. Digital tools such as mobile banking, e-commerce platforms, social media, and cloud computing have enabled businesses to streamline operations, increase efficiency, and expand their customer base. In contrast, the adoption of such tools in Afghanistan remains low, particularly in rural and under-resourced regions (Ndifor et al., 2023).

The ongoing proliferation of internet-enabled mobile devices and international development efforts aimed at digital inclusion has created a window of opportunity for Afghan businesses to embrace digital transformation. Yet, despite these opportunities, significant barriers remain. These include unreliable power and internet infrastructure, cultural resistance to change, financial constraints, and a lack of cohesive government policy to support digital business environments.

Importance and Motivation

Digital transformation is increasingly seen as a key enabler of resilience and scalability for SMEs, particularly in conflict-affected and fragile economies. In the Afghan context, technology could provide a cost-effective means of overcoming infrastructural deficits, improving access to markets, and enhancing financial inclusion - especially for women entrepreneurs and youth-led businesses. The potential for technology to drive economic recovery and sustainable growth in Afghanistan cannot be overstated. However, realizing this potential requires a clear understanding of both the enabling factors and the barriers to digital adoption among SMEs. Motivated by this need, the present study offers a comprehensive analysis of the current technological landscape for Afghan SMEs, grounded in real-world evidence and informed by global and local experiences.

Problem Statement

While digital technologies have reshaped business operations across the globe, SMEs in Afghanistan lag significantly in their adoption. Despite the known benefits - such as increased efficiency, reduced costs, and expanded market reach - most small businesses in Afghanistan face considerable obstacles to technological integration. These include poor digital infrastructure, high costs of adoption, inadequate digital literacy, and security concerns. Moreover, the socio-political instability and weak institutional support exacerbate the challenges faced by Afghan entrepreneurs, limiting their ability to invest in or sustain digital transformation initiatives. Without targeted support, the digital divide between Afghan SMEs and their global counterparts is likely to widen, further marginalizing the country's private sector.

Objectives of the Study

The overarching goal of this research is to assess the role of technology in enhancing the operational capabilities of small businesses in Afghanistan. Specifically, the study seeks to:

• Explore how digital tools improve business efficiency, productivity, and competitiveness.
• Identify the key challenges and barriers to technology adoption among Afghan SMEs.
• Assess the potential benefits of digital transformation in the Afghan business context.
• Provide actionable recommendations to policy-makers, development agencies, and SME stakeholders for improving digital adoption.

Scope of the Study

This research focuses on Afghan SMEs operating primarily in urban and semi-urban areas within sectors such as retail, manufacturing, and services. It deliberately excludes large enterprises and government-operated entities, which are not representative of the challenges faced by the SME sector. The study is library-based and relies on secondary sources, including peer-reviewed journals, government reports, and institutional publications. It does not involve primary data collection but provides an evidence-based thematic synthesis that draws upon global best practices and their applicability to Afghanistan.

Structure of the Paper

The paper is structured as follows:

Section 2: Literature Review provides an overview of existing research on SME digital adoption, with a focus on Afghanistan and comparable fragile economies.

Section 3: Methodology describes the research design, data sources, and thematic analysis framework used in the study.

Section 4: Results presents the main findings, categorized into six key themes.

Section 5: Discussion interprets these findings and explores their practical implications.

Section 6: Conclusion summarizes the study, outlines limitations, and suggests directions for future research.

Digital transformation has emerged as a catalyst for business innovation, operational efficiency, and resilience in both developed and developing economies. In fragile states like Afghanistan, where conflict and instability have weakened conventional economic structures, technology offers a strategic pathway for small businesses to overcome structural and financial limitations. SMEs play a crucial role in Afghanistans economic landscape by providing employment, supporting local development, and serving as engines of entrepreneurship. However, their potential remains largely untapped due to technological constraints and institutional deficiencies.

This literature review synthesizes existing global and local research on how digital tools - such as mobile banking, cloud computing, e-commerce platforms, and social media - are transforming small business operations. It highlights both the opportunities and barriers faced by Afghan SMEs and identifies gaps in the literature that this study aims to address.

The Potential of Technology for Afghan SMEs

Several studies highlight the transformative potential of digital tools in Afghanistans fragile business environment. Mobile banking, social media, and e-commerce platforms have allowed SMEs to expand their customer base, improve service delivery, and maintain operations despite instability (Empowering Economic Growth in Afghanistan through Modern Technology: Opportunities and Challenges | DPMEA, 2022), (In Afghanistan, New Technologies for Doing Business in the 21th Century, 2015) ,(Hashimi & Azeem, 2025). Cloud-based platforms and digital financial tools have emerged as cost-effective alternatives to physical infrastructure, helping small businesses manage logistics, conduct transactions, and store data remotely (Dawodi et al., 2023a, 2023b), (Digital Payments Could Make Aid Faster and More Effective, Especially for Women and Isolated Communities, 2023; Abu-Matar, 2025).

Despite infrastructure limitations, increasing mobile phone usage and internet access have opened up new opportunities. Mobile-based learning tools and social media platforms have been used for business training and customer engagement, particularly among women and youth entrepreneurs (Díaz-Arancibia et al., 2024), (United Nations Conference on Trade and Development, 2020). However, adoption remains uneven, with rural and female-led SMEs disproportionately affected by poor infrastructure and low digital literacy (Habibi et al., 2016).

Digital Transformation and Operational Efficiency

Digital transformation has significantly improved SME operational efficiency across sectors. In similar developing economies, the use of enterprise software, mobile payments, and cloud storage has reduced delays, streamlined workflows, and enhanced productivity (Afghanistan Shows the Way in E-Government, 2015; Technological Transformation for Jobs in Africa: How Digital Development Can Support Good Jobs for All, 2022). Afghan SMEs using tools like WhatsApp, Google Workspace, and mobile payment platforms have reported better communication, inventory control, and customer service (Hashimi & Azeem, 2025; Ghobakhloo & Iranmanesh, 2021). International case studies indicate that even basic tools can deliver measurable improvements. For example, real-time inventory management and mobile-based financial reporting have enabled Afghan SMEs to operate leaner, reduce manual errors, and improve transparency (Beyond Recovery of SMEs through Digitalization (Digital Way), 2020), (Small Goes Digital How Digitalization Can Bring about Productive Growth for Micro and Small Enterprises, 2021).

Empowering Women Entrepreneurs

Technology has emerged as a powerful equalizer for Afghan women entrepreneurs. Social media platforms like Facebook and WhatsApp are being used by women to sell products, manage customer relationships, and promote home-based businesses (Listening to Women Entrepreneurs in Afghanistan: Their Struggle and Resilience, 2024). Mobile payments have increased womens financial independence and participation in the formal economy by reducing reliance on intermediaries (Digital Payments Could Make Aid Faster and More Effective, Especially for Women and Isolated Communities, 2023), (Digital Payments Could Make Aid Faster and More Effective, Especially for Women and Isolated Communities, 2023). Despite this progress, challenges persist. Women often face limited access to smartphones, low digital literacy, and socio-cultural barriers that inhibit their digital participation (United Nations Conference on Trade and Development, 2020), (UN Women, 2022). Programs offering gender-specific training and subsidized technology access have shown promising results, but large-scale implementation is still lacking.

Policy Environment and International Collaboration

The Afghan government, supported by international organizations, has initiated several digital governance and SME development programs. Streamlined business registration processes, digital licensing, and mobile payment initiatives have reduced bureaucratic delays and increased formalization (Afghanistan Shows the Way in E-Government, 2015; Small Goes Digital: How Digitalization Can Bring about Productive Growth for Micro and Small Enterprises, 2021). Reports from the World Bank, UNDP, and UNCTAD highlight the importance of policy coherence, digital infrastructure investment, and regional cooperation (Afghanistan Shows the Way in E-Government, 2015), (Small Goes Digital How Digitalization Can Bring about Productive Growth for Micro and Small Enterprises, 2021), (SDG Digital Acceleration Agenda, 2023), (Breard, Corradi, & Kallick, 2024). However, gaps remain in regulatory enforcement, interagency coordination, and SME-specific policy design. Studies call for a national digital transformation strategy tailored to Afghanistan's post-conflict context, with targeted investments in connectivity, training, and cybersecurity (Small Goes Digital: How Digitalization Can Bring about Productive Growth for Micro and Small Enterprises, 2021; Breard, Corradi, & Kallick, 2024).

Innovation and Digital Competitiveness

Innovation, enabled through accessible technologies, is critical for SMEs to remain competitive in a constrained market. Afghan SMEs have shown resilience by adapting digital tools to local needs - such as using Telegram groups for bulk orders and leveraging social media for targeted marketing (Hashimi & Azeem, 2025), (Informal Businesses and the Shift to Digital: What We Learned from Small Enterprises Joining the Digital Economy, 2023). UNCTAD and World Bank studies emphasize that innovation in fragile contexts often involves repurposing low-tech tools to solve logistical and communication problems (Breard, Corradi, & Kallick, 2024), (The Upside of Digital for the Middle East and North Africa, 2022). Innovation hubs, incubators, and remote service delivery models are also emerging as important enablers of competitiveness.

Youth and Agricultural SMEs

Youth and agricultural SMEs represent two key demographics for digital development in Afghanistan. Studies show that Afghan youth are increasingly engaging with digital platforms for freelance work, app development, and e-commerce (Afghan Youth Sees Future in Emerging ICT Sector, 2017), (Despite Big Hurdles, Afghanistan Could Tap Youth-Driven IT Sector to Scale-up E-Commerce Operations| UN Trade and Development (UNCTAD), 2019). Meanwhile, agro-SMEs are using SMS-based price alerts, WhatsApp for logistics coordination, and mobile apps for weather forecasting and market access (Hashimi & Azeem, 2025), (Adhikari & Chanda, 2024). Digital interventions in these sectors can enhance productivity, reduce risk, and support rural development. However, this requires inclusive infrastructure investment and integration of youth into national digital strategies (Digital Payments Could Make Aid Faster and More Effective, Especially for Women and Isolated Communities, 2023), (SDG Digital Acceleration Agenda, 2023).

Literature Gaps

Despite growing literature on digital transformation in Afghanistan, several gaps remain:

• Limited empirical research focused solely on SMEs outside urban centers.
• Lack of gender-disaggregated data on technology adoption.
• Insufficient analysis of informal and micro-enterprise digital behaviors.
• Few comparative studies linking Afghanistans experience to other post-conflict or low-income countries.

This study addresses these gaps through a comprehensive SLR that synthesizes global and Afghan-specific findings to provide practical insights into the digital transformation of SMEs in fragile contexts.

Research Design

This study adopts a qualitative descriptive approach using a Systematic Literature Review (SLR) framework to explore the role of digital technology in enhancing the operations of small and medium enterprises (SMEs) in Afghanistan. The research is entirely library-based and draws on secondary data from peer-reviewed journals, institutional reports, and government publications. The SLR design ensures methodological transparency, repeatability, and credibility, enabling a comprehensive synthesis of existing knowledge relevant to the research objectives.

Given Afghanistan's complex and fragile economic environment, this approach allows the researcher to examine real-world data and validated case studies from diverse sources while bypassing the risks and logistical limitations associated with primary data collection.

Systematic Literature Review Protocol

The SLR was conducted following the PRISMA (Preferred Reporting Items for Systematic Reviews and Meta-Analyses) protocol. This structured methodology supports a reproducible, rigorous, and comprehensive review process. The steps followed are detailed below:

Data Sources

A total of 40 sources were selected from:

• Academic journals such as Sustainability, Journal of Manufacturing Technology Management, MDPI, and All Commerce Journal.
• Institutional reports by UNDP, World Bank, UNCTAD, ILO, UNCDF, and Asian Development Bank.
• Government publications from the Afghan Directorate of Policy, Monitoring and Evaluation Affairs (DPMEA), Ministry of Communications and Information Technology, and others.

All documents were accessed through scholarly databases (Google Scholar, ResearchGate) and official repositories of international organizations.

Search Strategy

Searches were conducted between January 2010 and March 2025 using the following keywords and Boolean operators:

• “technology AND small businesses AND Afghanistan”
• “SME digital transformation Afghanistan”
• “ICT adoption OR digital tools AND Afghan SMEs”
• “e-commerce OR mobile banking OR fintech AND Afghanistan”

Only English-language documents were considered. Duplicates were removed, and abstracts were screened to assess relevance.

Inclusion Criteria

Studies were included if they:

• Focused on Afghanistan or comparable fragile/developing economies.
• They were published between 2010 and 2025.
• Presented empirical findings (quantitative, qualitative, or case-based).
• Came from peer-reviewed or credible institutional/government sources.

Exclusion Criteria

• Studies were excluded if they:
• Focused exclusively on large enterprises or unrelated sectors.
• They were opinion pieces, blog posts, or non-peer-reviewed content.
• Lacked sufficient detail or empirical evidence.

Study Selection Process

From an initial pool of 120 documents, 74 were shortlisted after abstract screening. After applying the inclusion and exclusion criteria, 40 high-quality sources were retained for final analysis.

Data Extraction and Review

Each of the 40 retained documents was reviewed using a Literature Review Matrix designed to capture the following information:

• Title and authorship
• Type and origin of source
• Key findings and empirical data
• Initial codes and final thematic categories

Recurring themes and patterns were documented, enabling systematic coding and categorization of the data for further analysis. For example, studies (Hashimi & Azeem, 2025; Dawodi et al., 2023a, 2023b), UNDP (Digital Payments Could Make Aid Faster and More Effective, Especially for Women and Isolated Communities, 2023), were instrumental in identifying the themes of mobile finance, gender inclusion, and digital adoption barriers.

Data Analysis Technique

Braun and Clarke's six-phase thematic analysis model was employed to analyze and synthesize the data. This qualitative method allowed for a deep interpretation of patterns across diverse datasets. The six steps included:

1. Familiarization: Thorough reading and re-reading of each document to gain contextual understanding.
2. Initial Coding: Manual extraction of recurring terms and concepts such as “e-commerce,” “cloud storage,” “mobile banking,” and “digital barriers.”
3. Searching for Themes: Grouping similar codes under provisional themes.
4. Reviewing Themes: Refinement and re-categorization of themes to avoid overlaps and ensure distinctiveness.
5. Defining and Naming Themes: Finalization of six key themes relevant to Afghan SMEs:

• Digital Financial Services
• E-commerce
• Cloud Computing
• Cybersecurity
• Social Media
• Capacity Building

6. Producing the Report: Themes were used to guide Sections 4 and 5 of this paper.

This approach ensured that insights were grounded in verifiable evidence and applicable to the Afghan SME context.

Source Quality Appraisal

All sources were rated for credibility and categorized as follows:

Ethical Considerations

Ethical research principles were maintained throughout the review process:

• All sources were cited appropriately to avoid plagiarism.
• Only open-access or officially published documents were used.
• No primary data involving human subjects was collected, avoiding the need for institutional review board approval.
• The analysis was conducted objectively without bias or misrepresentation.

Limitations

This research has several limitations:

1. It does not include primary data collection, such as interviews or surveys.
2. The generalizability of findings may be limited due to the reliance on secondary data.
3. Some data may reflect broader regional trends rather than Afghanistan-specific contexts.
4. The evolving nature of Afghanistan's political and technological environment may influence the applicability of certain findings over time.
5. Despite these limitations, the study provides a rigorous, evidence-based overview of digital transformation among Afghan SMEs, suitable for policy guidance and future research planning.

This section presents the key findings derived from the analysis of 40 high-quality academic and institutional sources. Thematic analysis identified six dominant categories reflecting how technology is being used, perceived, and constrained in the context of small business operations in Afghanistan. These categories include: (1) Digital Financial Services, (2) E-commerce and Online Marketplaces, (3) Cloud Computing, (4) Cybersecurity and Digital Threats, (5) Social Media, and (6) Capacity Building. Each theme highlights both the benefits and limitations of technology adoption among Afghan SMEs.

Digital Financial Services and Mobile Banking

Several studies confirmed that mobile banking tools - such as M-Paisa and digital Hawala platforms - have greatly improved financial access and transaction security for Afghan SMEs (Hashimi & Azeem, 2025), (Digital Payments Could Make Aid Faster and More Effective, Especially for Women and Isolated Communities, 2023), (Digital Payments Could Make Aid Faster and More Effective, Especially for Women and Isolated Communities, 2023). These services enable businesses to conduct payments, manage payroll, and receive remittances without relying on physical banks. This is particularly impactful in remote or insecure areas where formal banking infrastructure is sparse.

• Benefits: Increased financial inclusion, reduced cash-handling risks, streamlined operations, and enhanced access to credit (Dawodi et al., 2023a, 2023b), (Digital Payments Could Make Aid Faster and More Effective, Especially for Women and Isolated Communities, 2023).
• Challenges: Low mobile penetration in rural areas, limited trust in digital systems, and regulatory uncertainty (United Nations Conference on Trade and Development, 2020), (Habibi et al., 2016).

Digital finance was found to be especially empowering for women-owned businesses, which benefit from greater autonomy and fewer interactions with male-dominated financial institutions (Digital Payments Could Make Aid Faster and More Effective, Especially for Women and Isolated Communities, 2023).

E-commerce and Online Marketplaces

Platforms like Baqal and Click. af have enabled Afghan SMEs to engage in domestic and cross-border digital commerce, increasing sales and brand visibility (Hashimi & Azeem, 2025), (Listening to Women Entrepreneurs in Afghanistan: Their Struggle and Resilience, 2024; Breard et al., 2024). Online marketplaces allow small businesses to reach customers beyond their immediate geographic areas and provide an avenue for informal enterprises to formalize their operations.

• Benefits: Expanded market reach, increased sales, reduced overhead, and direct customer engagement (Díaz-Arancibia et al., 2024), (Small Goes Digital: How Digitalization Can Bring about Productive Growth for Micro and Small Enterprises, 2021).
• Challenges: Poor internet penetration, low digital literacy, and logistical barriers such as unreliable delivery networks (United Nations Conference on Trade and Development, 2020; Breard et al., 2024).

Urban SMEs were more likely to use e-commerce platforms, while rural businesses continued to face infrastructure-related barriers.

Cloud Computing for Business Operations

Cloud services were reported to reduce operational costs, improve workflow efficiency, and enable remote management of staff, inventory, and customer databases (Technological Transformation for Jobs in Africa: How Digital Development Can Support Good Jobs for All, 2022), (Ghobakhloo & Iranmanesh, 2021; World Bank Group, 2016). Afghan SMEs used tools like Google Drive and WhatsApp Business to store and share documents, monitor transactions, and coordinate tasks.

• Benefits: Cost savings, scalability, improved data access, and disaster recovery support (Díaz-Arancibia et al., 2024), (Technological Transformation for Jobs in Africa: How Digital Development Can Support Good Jobs for All, 2022).
• Challenges: Dependence on internet availability, data privacy concerns, and limited technical know-how (United Nations Conference on Trade and Development, 2020; Small Goes Digital: How Digitalization Can Bring about Productive Growth for Micro and Small Enterprises, 2021).

Cloud-based solutions were especially helpful during periods of instability or lockdown, enabling SMEs to maintain operations remotely (Hashimi & Azeem, 2025).

Cybersecurity Concerns and Digital Threats

Despite growing use of digital tools, cybersecurity remains an under-addressed issue among Afghan SMEs. Many businesses are unaware of common threats such as phishing, ransomware, and unauthorized access to data (Breard et al., 2024; Mahmood & Nazar, 2024).

• Observed Threats: Data loss, identity theft, online fraud, and cyberattacks targeting e-commerce platforms (Mahmood & Nazar, 2024).
• Barriers: Low cybersecurity literacy, lack of investment in secure systems, and minimal policy enforcement (Breard et al., 2024; Adhikari & Chanda, 2024).

The absence of national cybersecurity regulations specific to SMEs further increases vulnerability in the digital ecosystem.

Social Media in Business Growth

Social media platforms like Facebook, Instagram, and WhatsApp have become indispensable tools for Afghan SMEs, especially for marketing, brand deve-lopment, and customer communication (Hashimi & Azeem, 2025), (Digital Payments Could Make Aid Faster and More Effective, Especially for Women and Isolated Communities, 2023), (Listening to Women Entrepreneurs in Afghanistan: Their Struggle and Resilience, 2024). Social media allows even the smallest enterprises to compete for visibility cost-effectively.

• Benefits: Increased customer engagement, low-cost advertising, improved customer support, and market feedback (Digital Payments Could Make Aid Faster and More Effective, Especially for Women and Isolated Communities, 2023; Listening to Women Entrepreneurs in Afghanistan: Their Struggle and Resilience, 2024).
• Challenges: Platform dependence, low content creation skills, and fluctuating platform accessibility in rural areas (Díaz-Arancibia et al., 2024), (SDG Digital Acceleration Agenda, 2023).

Women and youth-led businesses were more likely to use these tools creatively to overcome mobility and infrastructure challenges.

Capacity Building and Digital Literacy

A recurring theme across all sources was the critical importance of digital skills training and capacity development. SMEs that received support through workshops, e-learning platforms, or international development initiatives demonstrated higher rates of technology adoption and sustainability (Dawodi et al., 2023a, 2023b; Díaz-Arancibia et al., 2024; Hackl, 2021).

• Effective Interventions: Mobile learning platforms, donor-funded digital literacy programs, and business mentorship for women and youth (Dawodi et al., 2023a, 2023b; Hackl, 2021).
• Remaining Gaps: Lack of curriculum localization, limited access to digital devices, and low outreach in rural provinces (United Nations Conference on Trade and Development, 2020; Breard et al., 2024).

Several studies recommended building national-level training centers and digital knowledge hubs to address this issue at scale.

The thematic findings from the systematic literature review underscore the complex but transformative role that technology plays in enhancing small business operations in Afghanistan. While digital tools have the potential to alleviate many longstanding operational challenges-such as restricted market access, inefficient workflows, and lack of formal financial services - their adoption is constrained by multiple structural, social, and regulatory barriers. The six core themes - Digital Financial Services, E-commerce, Cloud Computing, Cybersecurity, Social Media, and Capacity Building-provide a comprehensive framework for analyzing how Afghan SMEs interact with technology and where intervention is needed.

Digital Financial Services: A Tool for Inclusion

The widespread use of mobile money platforms like M-Paisa and mobile wallets has significantly improved financial inclusion for SMEs, particularly in underserved areas. These tools allow businesses to operate in cashless modes, which is essential in a conflict-affected context where physical banking infrastructure is unreliable (Hashimi & Azeem, 2025), (Digital Payments Could Make Aid Faster and More Effective, Especially for Women and Isolated Communities, 2023). However, limited mobile penetration and distrust in digital finance systems remain major obstacles (United Nations Conference on Trade and Development, 2020), (Digital Payments Could Make Aid Faster and More Effective, Especially for Women and Isolated Communities, 2023).

Notably, women-owned businesses benefit disproportionately from digital finance, as it provides them with secure and private means to manage capital (Digital Payments Could Make Aid Faster and More Effective, Especially for Women and Isolated Communities, 2023), aligning with global findings on fintech's role in gender empowerment (Digital Technologies Transforming Refugees Economic, Social, and Cultural Inclusion, 2024).

E-commerce: Bridging Markets, But Not Equally

E-commerce platforms like Click.af provide a much-needed channel for SMEs to overcome Afghanistan's geographical and logistical isolation. Businesses that successfully transition online have improved access to consumers and increased revenue (Hashimi & Azeem, 2025), (Listening to Women Entrepreneurs in Afghanistan: Their Struggle and Resilience, 2024). However, rural and informal SMEs struggle to keep pace due to weak connectivity and digital illiteracy, reflecting the urban-rural digital divide documented in other fragile economies (United Nations Conference on Trade and Development, 2020), (Breard et al., 2024). The uneven distribution of benefits calls for targeted investment in localized digital literacy and logistics support for rural entrepreneurs.

Cloud Computing: Efficiency with Conditions

Cloud-based systems offer scalable and cost-efficient alternatives to physical infrastructure. Afghan SMEs using platforms such as Google Workspace and WhatsApp have reported higher operational efficiency, especially during crises (Technological Transformation for Jobs in Africa: How Digital Development Can Support Good Jobs for All, 2022), (Ghobakhloo & Iranmanesh, 2021). However, usage remains surface-level due to limited technical training and unreliable internet access (United Nations Conference on Trade and Development, 2020), (Small Goes Digital: How Digitalization Can Bring about Productive Growth for Micro and Small Enterprises, 2021). Unlike in more developed markets, where cloud computing enables predictive analytics and customer personalization, Afghan SMEs mostly use cloud services for basic storage and communication functions. This highlights the need for staged capacity-building models that gradually expand usage depth.

Cybersecurity: An Unseen but Growing Threat

Cybersecurity is often neglected in discussions about SME digital adoption in fragile states. Afghan SMEs are particularly vulnerable due to their reliance on basic digital tools and lack of awareness of digital threats (Breard et al., 2024; Adhikari & Chanda, 2024). This is consistent with ILO and UNCTAD reports, which stress the importance of building digital resilience in conflict-affected economies (Hackl, 2021; Adhikari & Chanda, 2024). The absence of national cybersecurity frameworks tailored to small businesses exacerbates risk exposure. Developing affordable and culturally appropriate cybersecurity solutions should be a policy priority.

Social Media: The Equalizer

Social media has emerged as a low-cost, high-impact tool for marketing, customer engagement, and sales growth. Its accessibility and visual nature make it particularly valuable for women, youth, and micro-enterprises operating from home or informal settings (Digital Payments Could Make Aid Faster and More Effective, Especially for Women and Isolated Communities, 2023), (Listening to Women Entrepreneurs in Afghanistan: Their Struggle and Resilience, 2024). However, sustained benefits depend on digital content creation skills and platform-specific strategies, which are often underdeveloped (Díaz-Arancibia et al., 2024). This supports findings from other developing countries where social media is the digital entry point for many SMEs (Transition to the Digital Economy: Technological Capabilities as Drivers of Productivity, 2020).

Capacity Building: The Critical Enabler

Digital transformation is not sustainable without investment in human capital. Across all reviewed sources, digital literacy was identified as the most critical enabler - and barrier - of technology adoption. While mobile learning platforms and donor-funded programs have shown promise, they remain fragmented and limited in scale (Dawodi et al.,  2023a, 2023b), (Hackl, 2021). Programs must evolve beyond one-time training and instead build long-term digital skills ecosystems through public-private partnerships, local tech hubs, and targeted curricula.

Implications for Policy and Practice

The findings carry several implications for key stakeholders:

For Policymakers

• Invest in Rural Infrastructure: Improving mobile broadband and electricity coverage will unlock the potential of e-commerce, mobile banking, and cloud solutions for rural SMEs.
• Develop SME-focused Cybersecurity Policies: Introducing simplified, accessible digital security standards will help SMEs protect themselves against growing online threats.
• Create Incentives for Digital Adoption: Tax relief or digital equipment subsidies can reduce cost barriers for small businesses adopting new technologies.

For Development Agencies

• Expand Gender-Specific Digital Training: Women entrepreneurs need culturally sensitive programs focused on mobile tools, financial literacy, and online sales.
• Support Digital Trust and Awareness Campaigns: Efforts to build trust in digital finance and online marketplaces will increase adoption and usage.
• Fund Interoperable Digital Infrastructure: Backing open-source platforms and national ID-linked payment systems can reduce reliance on donor-dependent tools.

For SME Owners and Practitioners

• Start Small, Scale Gradually: Simple tools like WhatsApp for orders or mobile payments for sales can yield significant efficiency gains before investing in complex solutions.
• Collaborate with Peers: Knowledge sharing within local SME clusters can accelerate collective learning and resource pooling.
• Seek Donor and Government Support: Tapping into available training and infrastructure programs can mitigate initial risk and costs.

Comparative Reflections

Many of the patterns observed in Afghanistan mirror those seen in other fragile and conflict-affected states (FCS). Countries in Sub-Saharan Africa, South Asia, and the Middle East have faced similar challenges in digitalizing their SME sectors (Afghanistan Shows the Way in E-Government, 2015), (Adhikari & Chanda, 2024). Successful interventions in these regions have typically combined grassroots innovation, regional cooperation, and multi-stakeholder engagement - lessons that are directly transferable to the Afghan context.

This study examined the role of digital technology in enhancing the operations, growth, and resilience of small and medium enterprises (SMEs) in Afghanistan. Through a systematic literature review of 40 peer-reviewed academic and institutional sources, the research identified six core themes that define the current technological landscape for Afghan SMEs: Digital Financial Services, E-commerce, Cloud Computing, Cybersecurity, Social Media, and Capacity Building. The results indicate that technology has become a vital enabler of SME development, offering substantial benefits such as increased financial inclusion, operational efficiency, market expansion, and business continuity. Tools like mobile banking and cloud platforms have allowed Afghan businesses to bypass traditional barriers and operate in highly constrained environments. Social media has emerged as a powerful low-cost marketing tool, while cloud computing enables businesses to scale without significant capital expenditure. Despite these advantages, Afghan SMEs face a range of challenges that hinder broader technology adoption. These include poor digital infrastructure, limited digital literacy, cybersecurity vulnerabilities, high costs of digital solutions, and socio-cultural barriers - particularly for women and rural entrepreneurs. The uneven distribution of digital benefits reveals systemic gaps in infrastructure and policy, necessitating targeted interventions. The research underscores the urgent need for a coordinated digital transformation strategy for Afghanistan's SME sector. Key stakeholders - including policymakers, development agencies, and business leaders - must address the identified barriers through infrastructure investment, regulatory clarity, inclusive education programs, and technology subsidies. More importantly, capacity building must take center stage. Without sustained efforts to increase digital literacy and technical skills, even the most accessible technologies will remain underutilized. A long-term vision for SME digitalization in Afghanistan must prioritize people-centered innovation, security, and affordability.

Based on the research findings, the following recommendations are proposed:

• Infrastructure Development: Expand mobile internet coverage and ensure reliable electricity, especially in rural and underserved regions.
• Digital Literacy and Training: Establish community-based digital learning hubs to train SMEs in e-commerce, financial tools, and cybersecurity.
• Cybersecurity Awareness: Launch national awareness campaigns on digital safety and provide SMEs with accessible protection tools.
• Gender-Inclusive Policies: Offer subsidized devices and safe digital spaces for women entrepreneurs, supported by tailored mentorship programs.
• Public–Private Partnerships: Encourage collaborations between government, local startups, and international organizations to scale effective tech adoption models.

Contribution to Knowledge

This study contributes to the academic discourse by offering a structured, evidence-based understanding of how technology influences small business operations in fragile economies. It is among the first to consolidate data from international and Afghan-specific literature using a thematic SLR approach focused on SMEs. The study provides a scalable framework for evaluating digital transformation in other post-conflict or developing countries.

Limitations

The research is limited by its reliance on secondary data. While the systematic literature review provided rich insights, the absence of primary data - such as interviews or surveys with Afghan SME owners - limits the depth of contextual understanding. Additionally, as digital trends evolve rapidly, some findings may become outdated if not followed up with periodic field validation.

Future Research Directions

Future studies should explore the following areas:

• Primary research involving interviews or surveys with Afghan SME owners.
• Impact assessments of specific digital interventions (e.g., mobile learning, e-commerce training).
• Gender-disaggregated analysis of technology adoption in rural versus urban settings.
• Longitudinal studies examining digital transformation over time in post-conflict economies.

The author would like to express deep gratitude to Mr. Wasimullah Safi, Principal Supervisor at Bakhtar University, for his consistent support, insightful feedback, and guidance throughout this research project. His expertise and encouragement were instrumental in shaping the direction and quality of this study. Sincere appreciation is also extended to the faculty and staff of the Computer Science Department at Bakhtar University for providing an academically enriching environment and access to critical resources necessary for this research.

The author is especially thankful to his family, whose unwavering support, patience, and motivation have been invaluable during the research and writing process. Their encouragement has been a source of strength and determination. Lastly, heartfelt thanks go to all peers, friends, and colleagues who contributed their time, ideas, and moral support during the completion of this work. 

The author declares that they have no conflicts of interest related to this study.

A.H.H.: Conceptualization, methodology, writing the manuscript. M.S.N.: Contributed to the analysis, investigation, and finally checked the manuscript, editing, and Formal Analysis. Both authors are involved in this research and have approved the manuscript for publication.