3-in-4 SMEs surveyed in Kenya concerned about rising cost of doing business  

From surviving to thriving in the post-COVID world, small and medium enterprises (SMEs) in Kenya have demonstrated optimism and confidence about the next 12 months. These are the findings of the second edition of the Mastercard Eastern Europe, Middle East and Africa (EEMEA) SME Confidence Index.

The 2021 inaugural SME Confidence Index delved into the impact of the pandemic on SMEs across sectors, products and services, and how they are embracing a digital future.

Omnichannel payments and digitizing business present the biggest growth opportunity for Kenyan SMEs

As a continuation, the second edition of the survey reveals that while 66% of SMEs across Kenya are confident about business growth, a significant number of businesses (97%) believe that omnichannel payments present the biggest opportunity for them followed by digitizing their business (96%) and access to training and development support (95%).

Other factors contributing to business growth include training and upskilling staff (94%), easier access to financial services and credit funding (93%), better data, analytics and insights (91%) and being able to transact internationally (83%).

As companies recover from the pandemic and return to growth phase, the research shows that 73% of SMEs in Kenya are concerned about rising cost of doing business in 2023 and access to capital funding (44%).

“The SME Confidence Index results are highly encouraging, as they reveal that Kenyan SMEs are optimistic about their business growth prospects with a notable focus on the transformative potential of digital payments. Micro, small, and medium size businesses play a pivotal role in propelling Kenya’s economy forward, and at Mastercard, we remain dedicated to empowering them by facilitating their digital integration and equipping them with the skills they need and grow their businesses,” said Shehryar Ali, the Senior VP and Country Manager for East Africa and Indian Ocean Islands, Mastercard.

68% of SMEs in Kenya project increase of similar revenue in 2023 

The survey reveals that medium-sized businesses (87%) are far more optimistic about the next 12 months as compared to 66% of micro and small businesses surveyed.

According to the Kenya Institute for Public Policy Research and Analysis, SMEs contribute to over 90% of total labor force and play a key role in poverty reduction and economic development. They are also a source of innovation, competitiveness, goods and services, and entrepreneurial skills. There are over 7.4 million SMEs employing approximately 14.9 million Kenyans in various sectors of the economy.

Rising cost of goods and services and impact of COVID-19 remain key factors impacting business in Kenya

SMEs in Kenya have identified rising cost of goods and services (65%), lingering effects of the pandemic (61%) and inflation (52%) as factors impacting business growth.

Four out of 10 SMEs are concerned about paying back loans from banks and governments. Additionally, easy access to capital funding (23%) and red tape regulations (23%) remain key challenges.

Mastercard leverages its extensive network, state-of-the-art technology, and global partnerships to help SMEs to adapt to changing commercial environments and new spending patterns. The company works with governments and the private sector to build synergies that advance financial inclusion and motivates consumers and merchants to support small businesses.

The survey involved telephone (or face-to-face) interviews of SME decision-makers in 11 countries across three regions (MENA, Africa, and Eastern Europe). Up to 300 respondents per country in Kenya, Nigeria, and South Africa; and up to 100 respondents per country in Egypt, UAE, Saudi Arabia, and 300 respondents in Qatar. Up to 100 respondents per country in Georgia, Turkey, Azerbaijan, and Kazakhstan, were also interviewed. It involved a nationally representative sample of SME size.


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