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Purpose: This paper examines the interaction of human capital and CRM on the performance of SMEs in Yemen. Design/methodology/approach: The study used a quantitative approach in investigating the interacting effect of human capital on the relationship between CRM and SMEs' performance in Yemen. The PLS-SEM analysis was performed to test the hypotheses. Findings: It was observed that key customer focus, technology-based CRM and CRM knowledge management were effective drivers of SME performance, but not CRM organization tools. It was also ascertained that human capital has no moderating effect on the key customer focus and knowledge management relationships with performance, although it does moderate the relationships between performance and CRM organization and technology-based CRM respectively. Research limitations/implications: Because this study is limited to manufacturing SMEs in Yemen, the results cannot be generalized to other types of industry such as services, whose structure and vision differ from those of manufacturing SMEs. While the current results may be appropriate for SMEs in other developing countries, the researcher believes they are unsuitable for SMEs in advanced economies with different financial structures and employee and management cultures. Practical implications: The empirical insights of this study are valuable for the owners, managers and professionals in the SMEs manufacturing sector in developing countries, to enrich their organizational performance through CRM adoption, while considering the moderating effect of human capital. Originality/value: This is the first empirical work to confirm way the main drivers of human capital, including in the analysis the impact of CRM dimensions and SME performance, in the context of the manufacturing sector. In support of an original conceptual model, the insights contribute to the literature on CRM, SMEs in the manufacturing sector, human capital and emerging economies. [ABSTRACT FROM AUTHOR]