Most SMEs in Kenya optimistic about recovery: Mastercard survey

Mastercard SME confidence index 2021: Kenya

What you need to know:

  • Mastercard MEA SME Confidence Index shows that 61 percent of small and medium enterprises (SMEs) in Kenya are seeing positive signs of recovery, and 62 percent of those in Africa are optimistic about the next 12 months.
  • SMEs in Kenya are proactively planning for a future fuelled by easier access to capital, better data, acceptance of digital payments and digitised business operations.

After facing unprecedented changes in the wake of the Covid-19 pandemic, the confidence of Small and Medium Enterprise (SME) in Kenya is on the rise, according to the latest research by Mastercard.

The inaugural Mastercard Middle East and Africa (MEA) SME Confidence Index found that 62 percent of SMEs in Africa are optimistic about the next 12 months, and 61 percent of those in Kenya are seeing positive signs of recovery. 

Access to funding and digitisation key for future growth

As Kenya gradually stages its economic recovery, small and medium-sized businesses in the country have identified easier access to funding (73 percent), acceptance of digital payments, better data and insights, and digitising operations (72 percent) as the top three drivers of growth. This highlights opportunities that arise from both internal transformation as well as industry regulations and trends. See some quick stats here.

Making sure that SMEs have all the support they need to go digital and grow digitally is a key focus for Mastercard. The company works closely with various stakeholders, including the government and banking institutions, to create opportunities for SMEs, which represent 98 percent of all businesses in Kenya.

Mastercard has pledged $250 million and committed to connect 50 million micro, small and medium-sized businesses to the digital economy by 2025, using its technology, network, expertise and resources in support of its goal of building a more sustainable and inclusive digital economy. For many small businesses, reducing their dependence on cash by embracing digital payments has played a major role in being able to get paid and maintain revenues.

“SMEs have been among those hit hardest by the pandemic, and Mastercard is dedicated to continuing supporting this sector, especially in terms of connections to the digital payments acceptance tools, insights and cybersecure tech solutions they need. Although challenges remain, the SME Confidence Index provides a helpful overview for all stakeholders on what we can do to grow the contribution of this sector in Kenya,” says Shehryar Ali, Country Manager, East Africa, Mastercard. “It is very encouraging to see that the three Ds – data, digital payments and digitised operations – are already actively in play among SMEs in Kenya as they position themselves for multi-dimensional recovery and growth,” he adds. 

The cost of business a key concern; public and private partnerships seen as critical for growth

When asked about the main thing that keeps them up at night, 49 percent of SMEs in Kenya mentioned the challenge to maintain and grow their business as their top issue. Looking at concerns over the next 12 months, almost three-quarters (73 percent) identified the rising cost of doing business, while 44 percent cited access to capital. Private sector partnerships (61 percent) and government-led initiatives (40 percent) were identified as having the biggest potential to positively impact SMEs and the wider 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,” says Ali.

As consumer trends evolve in a post-pandemic world, businesses must adapt and prepare for the future. Mastercard’s Economic Outlook 2021 estimates that 20-30 percent of the Covid-19 related surge in e-commerce will be a permanent trend in the share of overall retail spending globally.

Furthermore, recent studies from Mastercard show that 79 percent of Kenyan consumers are shopping more online than they did since the start of the pandemic, and that 99 percent of the shoppers would consider making a purchase with an emerging payment technology over the next year.

Survey Methodology

The Mastercard MEA SME Confidence survey involved telephone or face-to-face interviews of 1,533 SME decision-makers in seven countries in three regions: Middle East and North Africa, Sub-Saharan Africa, and Southern Africa. It was conducted from end of March to mid-May 2021.

About Mastercard

Mastercard is a global technology company in the payments industry. Our mission is to connect and power an inclusive, digital economy that benefits everyone, everywhere, by making transactions safe, simple, smart and accessible.

Using secure data and networks, partnerships and passion, our innovations and solutions help individuals, financial institutions, governments and businesses to realise their greatest potential.

Our decency quotient, or DQ, drives our culture and everything we do inside and outside of our company. With connections across more than 210 countries and territories, we are building a sustainable world that unlocks priceless possibilities for all. For more information, go to www.mastercard.com