61% of SMEs Hopeful for Covid-19 recovery: Mastercard

Recent research by Mastercard shows that 61% of SMEs in Kenya are hopeful for improvement in business activities even after the recessive Covid-19 impact on the economy. 

According to the first Mastercard Middle East and Africa (MEA) SME Confidence Index, 62 percent of African SMEs are hopeful about the next 12 months, while 61 percent of Kenyan SMEs are seeing indications of recovery.

Access to capital and digitization are critical for future prosperity.

Small and medium-sized enterprises in Kenya have cited improved access to capital (73 percent), adoption of digital payments, greater data and insights, and automating business operations (72 percent) as the top three drivers for growth as the country’s economy slowly recovers. This emphasizes the potential that comes as a result of both internal transformation and industry regulations and trends.

Mastercard is focused on ensuring that SMEs have all of the resources they need to go digital and grow digitally. The company collaborates with a variety of stakeholders, including the government and financial institutions, to generate possibilities for SMEs, which account for nearly all of Kenya’s enterprises.

Mastercard has committed to connecting 50 million micro, small, and medium-sized enterprises to the digital economy by 2025, using its technology, network, knowledge, and resources to help the corporation achieve its aim of creating a more sustainable and inclusive digital economy. Many small businesses have found that lowering their reliance on cash through digital payment acceptance has made it easier to be paid and retain revenue.

“SMEs have been among those hit hardest by the pandemic, and Mastercard is dedicated to continuing support to this sector, especially in terms of connections to the digital payments acceptance tools, insights and cyber secure tech solutions they need.” Shehryar Ali, Mastercard’s East Africa Country Manager.

Despite the challenges, the SME Confidence Index gives a useful picture for all stakeholders on what we can do to increase this sector’s contribution in Kenya. The three Ds – data, digital payments, and digitized operations – are already active among SMEs in Kenya as they position themselves for multi-dimensional recovery and growth, which is quite positive.

Private partnerships viewed as an economic growth engine.

The challenge of maintaining and growing a business was cited as the top issue by 49% of SMEs in Kenya. When asked about their top concerns for the next 12 months, over three-quarters (73%) said growing costs of conducting business, while 44% said availability to financing. Partnerships between the private and public sectors (61%) and government-led efforts (40%) were recognized as having the greatest potential to favorably benefit SMEs and the Kenyan market.

“As SMEs in Kenya begin their path to recovery in a post-Covid world, their key concern is access to funding in order to maintain and grow their business. This can be achieved by leveraging the digital economy to drive greater inclusion by easing barriers to financial services. At Mastercard, we are committed to connecting businesses to the digital economy by working with partners to provide digital solutions and technology that will enable them to improve their operational efficiency, diversify their revenue and grow their businesses.” Shehryar Ali, 

Businesses must adapt and plan for the future as consumer trends change in a post-pandemic environment. According to Mastercard’s Economic Outlook 2021, 20-30% of the Covid-19-related spike in e-commerce will become a persistent trend in percentage of global retail spending. 

Furthermore, according to recent Mastercard research, 79 percent of Kenyan customers are purchasing online more than they were before the pandemic, and 99 percent of Kenyan buyers would consider making a transaction using an emerging payment technology in the coming year.

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