THE EFFECTS OF FINANCIAL RISK MANAGEMENT ON FINANCIAL PERFORMANCE OF MONEY EXCHANGE DEALERS

Financial and credit institutions, often known as non-bank financial institutions, are institutions that act as financial market intermediaries. In many ways, their services are comparable to those offered by banks. So, in Balkh province, research on the relationship between financial risks and the financial performance of these institutions and exchange dealers is particularly significant. In order to determine the consequences of these financial risks, they were separated into two groups and assessed using two hypotheses in this study. The impacts of each variable were estimated using a multivariate regression model. The independent variables in this model are systematic risk and credit risk, with the dependent variable of return on assets serving as a proxy for the financial institution’s performance. The statistical population of this study includes exchange dealers and financial institutions in Mazar-e Sharif’s Kefayat market, with 110 samples picked using a random sampling approach. The results demonstrate that all of the study variables that were tested at the 0.05 percent level of significance. The findings also show that there is meaningful and significant relationship between foreign exchange risk, market risk, interest rate risk, and purchasing power risk on the MXDs’ financial performance. For each indication of systematic risk variable, the beta coefficients are -0.168, -0.178, -0.102, -0.231, respectively. The components of the research’s second hypothesis demonstrate a substantial association between credit risk and default risk trend on financial performance, as well as the power of correlation with ROA, which are -0.068 and -0.378, respectively