Covid-19 shocks: Most SMEs bullish on recovery
Wednesday, June 30th, 2021 00:00 | 2 mins read
Small and Medium Enterprise (SME) confidence in Kenya is on the rise after the Covid-19 shocks, according to the latest research by MasterCard.
The inaugural Mastercard Middle East and Africa (MEA) SME Confidence Index found that 61 per cent of SMEs in Kenya are seeing signs of recovery, while 62 per cent in Africa are optimistic about the next 12 months.
As the country begins staging its economic recovery, the report indicates, SMEs in the country have identified easier access to funding (73 per cent), acceptance of digital payments, better data and insights, and digitising business operations (72 per cent) as the top three drivers for growth.
MasterCard focuses on supporting SMEs go digital and it 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 (Sh26.9 billion) and committed to connect 50 million micro, small and medium size businesses to the digital economy by 2025 using its technology, network, expertise and resources.
“SMEs have been among those hit hardest by the pandemic and we are is dedicated to continuing support to this sector,” said Shehryar Ali, Country Manager, East Africa, Mastercard in a statement.
He said although challenges remain, the SME Confidence Index provides a helpful overview for all stakeholders on what the firm can do to grow the contribution of the sector in Kenya.
“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,” said Ali.
When asked about the main thing that keeps them up at night, 49 per cent of SMEs in Kenya mentioned the challenge to maintain and grow their business.
Looking at concerns over the next 12 months, according to the survey, almost three-quarters (73 per cent) identified the rising cost of doing business, while 44 per cent cited access to capital.
Private sector partnerships (61 per cent) and government-led initiatives (40 per cent) 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,” Ali said.
This, he added, 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,” he added in the statement.
Mastercard’s Economic Outlook 2021 estimated that 20 to 30 per cent of the Covid-19 related surge in e-commerce would be a permanent trend in share of overall retail spending globally.