- New data now shows that over 40 per cent of Small and Medium Enterprises (SMEs) in Africa are earning more money than before the pandemic
- Mastercard indicates that 46 per cent of SMEs in Africa, Eastern Europe, and the Middle East have surpassed pre-pandemic levels
- Online business and international sales are key drivers, with seven in ten (71 per cent) recording above-global-average growth in online sales, while 77 per cent are planning to do more business internationally
Over 40 per cent of Small and Medium Enterprises (SMEs) in Africa are earning more money than before the pandemic.
New data by Mastercard indicates that 46 per cent of SMEs in Africa, Eastern Europe, and the Middle East have surpassed pre-pandemic levels.
According to the Borderless Payments Report, online business and international sales are key drivers, with seven in ten (71 per cent) recording above-global-average growth in online sales, while 77 per cent are planning to do more business internationally in the future.
The research, which covered over 3,000 small businesses from around the world, highlighted that 75 per cent of SMEs had to change their business model to survive the pandemic, whilst 64 per cent globally believe it has changed how they will do business forever.
The pandemic has sped up digital transformation to tap into cross-border opportunities, with nearly half (49 per cent) in the regions saying they now do more business internationally.
Almost three-quarters (64 per cent) of respondents credit cross-border payments with enabling their business to grow, clarifying that cross-border payments will be a crucial focus for business growth across the region.
59 per cent said they are now making and receiving more cross-border payments than before the pandemic. Seven in ten (72 per cent) say the pandemic has allowed them to source more competitive quotes from suppliers across borders, and 46% say using international suppliers reduces risk.
Mastercard partners with Meta to support digitization and growth of SMEs
Mastercard Executive Vice President Stephen Grainger said that the unprecedented disruption introduced by the pandemic had realigned regional and global economics, with many SMEs looking keenly toward prospects in new markets.
He added that with small businesses in the region and worldwide growing their international customer and supplier networks at pace, especially online, financial institutions must have the right cross-border solutions in place to support them.
“Cross-border payment systems must become faster, cheaper and more secure. Through a single point of access, Mastercard Cross-Border Services allows businesses to send and receive money safely and with the certainty, they crave,” he said.
In a related story, Mastercard, through the Center for Inclusive Growth, recently launched a new programme dubbed ‘Strive’ to strengthen small businesses’ financial resilience and support their recovery and growth.
The company said the global initiative would help micro and small enterprises transition to digital platforms and processes.
The technology company said the launch of the initiative comes when there has been a rapid shift toward digital services caused by the coronavirus pandemic.
An initial philanthropic investment of $25 million from the Mastercard Impact Fund was committed to the initiative, whose aim is to help more than five million micro and small businesses around the world access the tools and resources they need to digitise.
Commenting on the initiative, Michael Miebach, CEO of Mastercard, said small business owners are currently in need of innovative solutions that will help them grow in the wake of the pandemic.
“When small businesses thrive, our local communities and economies thrive, but when they struggle, the impact is widespread,” Miebach said.
As part of the Strive initiative, global platforms will combine with localised programmes to address and respond to the unique challenges and opportunities of the most vulnerable small business populations in regions worldwide.
Strive Community – the first of these programmes – will impact more than five million small businesses across Europe, Latin America, Africa, the Middle East and Asia.
Mastercard said it has partnered with Caribou Digital, a research and advisory firm focused on aiding the development of inclusive and ethical digital economies.
Through the partnership, the programme is expected to help small businesses use technology resources that will digitise their operations, streamline financial and back-office services and improve market access to ensure they succeed in our modern economy.