Small and Medium Enterprise (SME) confidence across most sectors is on the rise, even though different sectors were exposed to and impacted in diverging ways to the extensive changes of the COVID-19 pandemic, according to the latest Mastercard research.
The inaugural Mastercard Middle East and Africa (MEA) SME Confidence Index found that 78 percent of SMEs in the retail sector are optimistic about the next 12 months.
“Confidence levels were highest among retail businesses, slightly ahead of other sectors, like food and beverage, entertainment, construction, and manufacturing,” it found.
In addition, 70 percent of SMEs in retail are projecting revenues that will either grow or hold steady. Half of the companies are projecting an increase.
According to the study, many regional economies gradually enter the normalization and growth phase, and social restrictions continue to ease.
SMEs in the MEA region’s retail sector have identified training and upskilling staff (55 percent), acceptance of digital payments (49 percent), better data and insights (49 percent), and easier access to finance (49 percent) as the top drivers for growth.
The results highlight the opportunities for small businesses that arise from internal transformations and industry regulations and trends.
Ensuring that SMEs have all the support they need to go digital and grow digital is a crucial focus for Mastercard.
“The company works closely with the government, financial organizations, and the wider business community to create opportunities for the small business sector,” said the study.
Reducing small businesses’ dependence on cash through digital payments acceptance has played a significant factor in getting paid and maintaining revenues.
Mastercard has pledged $250 million and committed to connecting 50 million micros, small and medium-sized businesses globally to the digital economy by 2025 using its technology, network, expertise, and resources to support the company’s goal of building a more sustainable and inclusive digital economy.
“Mastercard is focused on connecting 25 million women entrepreneurs,” added the study.
Executive Vice President, Market Development, Middle East and Africa, Mastercard, Amnah Ajmal, indicated that SMEs are vital to the diversity of economies and economic recovery.
The MEA retail sector’s SMEs have shown resilience by prioritizing best practices and internalizing the power of digital, both in-store and online, through contactless and e-commerce.
“As their digital transformation successes increase adoption in other sectors, the whole ecosystem benefits by sustainably driving commerce forward into a future of growth,” she said.
According to the study, growing confidence levels in digital as a business imperative is tied to a deeper understanding and broader recognition among SMEs of the advantages that result from a growing digital economy.
When asked about the most significant benefits of a cash-free economy to their businesses, SMEs in retail stated faster access to revenues with 50 percent and ease of not processing cash with 47 percent, but specifically also mentioned less potential for fraud with 45 percent.
Most retail businesses in the region say they now need support to access a broader range of financial services of about 55 percent.
“SMEs in this sector also want support managing or upskilling teams (49%) and effective regulatory support from the government (48%).”
Furthermore, new payments methods are gaining ground, and 9 in 10 shoppers would consider purchasing an emerging payment technology over the next year, including cryptocurrency, biometrics, contactless, QR codes, digital wallets, and wearables.
