Most Kenyan SMEs plan to seek credit for fuelling business growth

Most Kenyan SMEs plan to seek credit for fuelling business growth:

Every passing day has brought more and more recognition and interest in the MSMEs (SMEs) given the sector’s contribution to the world and individual states GDPs and economies and especially in job creation in a world where rising populations (and especially among the young people & youth) have presented grave and dire unemployment and underemployment challenges and crises. 

The production of third edition of the Mastercard SME Confidence Index is therefore unsurprising. According to the Index, SMEs in Kenya are actively adopting digital payments, leveraging technological advancements, and forming strategic collaborations to enhance growth and resilience.

With 91 per cent of SMEs in Kenya adopting digital payments, efficiency is being enhanced and there is improved customer experience not to mention the strengthening of financial stability. This shift toward digitalization is reshaping SMEs operations, with many prioritizing secure payment solutions and broader financial inclusion to stay competitive in a rapidly evolving market.

According to Dimitrios Dosis, President –Eastern Europe, Middle East and Africa, Mastercard, SMEs are the backbone of economies, driving innovation, employment, and resilience. “As digital transformation accelerates, SMEs are unlocking new opportunities through digital payments and financial inclusion. Their ability to adapt and grow in a rapidly evolving business landscape reflects the strength of an ecosystem that prioritizes access to finance, digital enablement, and sustainable growth,” Dosis affirms.  

“As SMEs in Kenya continue to embrace digital transformation boosting access to secure payments, financial services, and strategic partnerships which are important for their success, we at Mastercard are committed to equipping businesses with the tools and solutions they need to grow, adapt, and thrive in an increasingly digital economy,” observes Mark Elliott, Division President, Africa, Mastercard.

According to the Index, the expanding Kenyan SMEs are increasingly recognizing the benefits of cashless transactions in driving operational efficiency and financial stability. Business owners cite reduced cash handling, smoother supplier payments, and faster transactions as notable advantages of digital adoption.

Focusing on the future, 97 per cent of SMEs plan to offer simple, seamless, and user-friendly payment methods to customers, while 95 per cent aim to accept digital payments across multiple channels. Additionally, 70 per cent are focused on ensuring safe and cyber-secure payment processing, reflecting the growing emphasis on secure digital financial ecosystems.

A Focus on growth, cyber-security, and financial access:

And while many SMEs anticipate maintaining or increasing their revenue, challenges such as rising costs of goods and services (see 71 per cent of responses) and inflation (see 68 per cent of responses) persist. To navigate the hurdles, over three-quarters of SMEs prioritize access to credit, with 40 per cent seeking financing to expand businesses and 21 per cent aiming to maintain daily operations.

The emphasis on digital transactions has also heightened the focus on cyber-security, with many businesses prioritizing digital security measures. Furthermore, SMEs recognize the importance of private sector partnerships and government initiatives in providing greater financial access, viewing these collaborations as crucial for long-term success.

Optimism despite challenges:

Further the Index shows that despite facing challenges, 66 per cent of the SMEs expect to achieve the same or higher revenue this year (2025) compared to year 2024, demonstrating resilience and adaptability. The SMEs further identified key areas where they need assistance to support growth including further digitization to meet changing customer needs (95 per cent), supporting and upgrading/improving their teams’ skills (95 per cent) and accessing a wider range of financial services (95 per cent).

Notably and through strategic collaborations, Mastercard is dedicated to supporting Kenyan SMEs in achieving their growth objectives, according to Mastercard sources. For instance, in September 2024, the company partnered with Safaricom, Kenya’s leading network operator, to enable 636,000 Kenyan merchants to access and thus accept digital payments globally via QR codes and NFC terminals which aided in digitalization.

Additionally, recognizing the need for credit access, the Mastercard Foundation Fund for Resilience and Prosperity, announced in April 2024, is a K sh ($126 million -M) grant program targeting Kenyan agribusinesses and digital economy SMEs, offering K sh ($500,000) to K sh ($2.5 M) in funding alongside technical assistance.

According to the sources, Mastercard remains committed to supporting SMEs in Kenya by leveraging its extensive network, cutting-edge technology, and strategic collaborations. By working with governments and private sector partners, the company continues to lead efforts in driving financial inclusion and supporting small businesses as they navigate the evolving commercial landscapes.

Notably, the Index survey methodology included—

Telephone or face-to-face interviews of SMEs decision-makers in nine countries across three regions (Middle East, Africa, and Eastern Europe), conducted by Ipsos; Up to 300 respondents per country in Kenya, Nigeria, South Africa and 100 in Morocco; Up to 100 respondents per country in Egypt, UAE and Saudi Arabia; Up to 100 respondents per country in Turkey and Kazakhstan; Nationally representative sample of SME size; & Readable sample sizes of Region clusters; SME size; Years the SME has been in business; the SME Industry in general; and the Gender & age of decision-maker.

Notably, Mastercard powers economies and also empowers people in over 200 countries and territories worldwide. “Together with our customers, we’re building a sustainable economy where everyone can prosper. We support a wide range of digital payments choices, making transactions secure, simple, smart and accessible. Further, our technology & innovation, and partnerships & networks combine to deliver a unique set of products and services that help people, businesses and governments realize their greatest potential,” the Mastercard sources affirm.