The role of Training Skills on the Relationship between Financial Services and Organization Performance among Small and Medium Enterprises in Libya

Omer Mohamed Ali; Mahmoud Abdualaziz Y. Yakhlf; Mohamed Aghel; Abdulhadi Mohamed Alhadi Drhoub

doi:10.32479/irmm.22587

Authors

Omer Mohamed Ali University of Sharia Science, Libya,
Mahmoud Abdualaziz Y. Yakhlf Department of Accounting, Faculty of Commerce, Azzaytuna University, Tarhunah, Libya,
Mohamed Aghel Management and Science University, Shah Alam, Malaysia.
Abdulhadi Mohamed Alhadi Drhoub Azzaytuna University, Tarhunah, Libya.

DOI:

https://doi.org/10.32479/irmm.22587

Keywords:

SME Performance, Financial Services, Training Skills, PLS-SEM, Libya, Human Capital

Abstract

This study investigates the impact of financial services on SME performance in Libya, examining training skills as a mediating mechanism. Using a quantitative research design, data were collected via a structured questionnaire distributed to 530 SMEs, with 392 valid responses obtained, representing a 74% response rate. The study employs PLS-SEM to assess direct and indirect relationships among constructs. The results indicate that financial services positively and significantly influence both SME performance and training skills. Training skills, in turn, positively affect SME performance and mediate the relationship between financial services and performance. These findings underscore that access to financial resources alone is insufficient; SMEs must possess internal capabilities, particularly through training, to effectively utilize financial services for enhanced outcomes. The study contributes to human capital and capability-based perspectives in fragile economies and provides practical insights for policymakers, financial institutions, and SME managers, emphasizing the importance of integrating financial support with targeted skill development initiatives to achieve sustainable SME growth.