Small and medium sized enterprises (SMEs) are a lifeline for many countries, especially in a developing continent such as Africa.
According to The World Bank, it is estimated that SMEs are responsible for 77% of all jobs in Africa and as much as half of the GDP in some countries. What this tells us is that, organizations such as Mastercard, have an opportunity to play a critical role in supporting SMEs as they deal with a myriad of challenges in the current economy.
The COVID-19 pandemic has presented an unpredictable climate that has tested SMEs’ ability to weather unforeseen circumstances and tested their operational capabilities.
Across the globe, small businesses regularly experience cash flow constraints that undermine their financial viability. The pandemic has only accentuated those pressures. For small business owners, particularly merchants that were forced to temporarily shut their stores, cash flow is likely more restricted today than ever before. When small businesses experience financial stress, it can mean they can’t pay their staff, restock inventory or keep their lights on.
For SMEs, access to the digital economy allows them to manage expenses and invoices and to automate and secure processes, freeing up valuable time and resources to focus on other aspects of running their businesses. The COVID-19 crisis has demonstrated the power of the digital economy to sustain societies and commerce during times of great adversity. It has also shown the extreme disadvantage faced by small businesses and people who cannot participate. For individuals, gaining access to the digital economy means being able to use affordable financial products and services that meet their needs – transactions, payments, savings, credit and insurance.
As a company, Mastercard aims to bring 1 billion people, including 50 million micro and small businesses into the digital economy by 2025. To achieve this, Mastercard has partnered and will initiate new partnerships over the next few years with leading organizations across Africa and around the world towards creating safe and accessible digitized payment solutions for small businesses and implementing digital identity projects.
In Nigeria, Mastercard has introduced a number of products and initiatives that underpin its collaboration with leading fintechs in the country and support small businesses. These include:
• ‘SME-in-a-Box’ – a new low-cost payments solution that enables small business owners to move their businesses online and accept a range of digital payments from their customers.
• Mastercard Engage connects hundreds of fintechs in Nigeria to thousands of Mastercard technology partners.
• NetPlusDotCom and Innovectives has enabled micro and small enterprises (MSMEs) in Nigeria with digital payment tools such as QR, USSD codes and contactless to advance their business – so far, a milestone 1 million MSMEs have been onboarded.
• Mastercard Fintech Express has been recently launched in the Middle East and Africa. This program will help facilitate the launch and expansion of emerging fintechs in Nigeria.
Mastercard also successfully hosted its first SME Masterclass webinars in Kenya and Nigeria. The webinars partnered with leading local SME thought leaders to deliver tailor-made insights that will support small businesses as they try to limit the impact of the pandemic.
Mastercard QR has been another flagship initiative, which takes advantage of the mobile shift to non-cash payments and overcomes infrastructure and barrier costs for micro-merchants.
And, just a few days ago, we launched the Mastercard Restaurant Week in partnership with Lost in Lagos to support small businesses in the dinning sector by encouraging more people to dine out.
As part of our $250M pledged to support small businesses across our markets globally, Mastercard is committed to powering small businesses and helping them to adapt to changing commercial environments through its resilient network, insights, technology, products and services and philanthropic support.
This support is particularly important in Africa, where SMEs play a critical role in eradicating poverty, contributing to economies and advancing financial inclusion. SMEs have the potential to make a positive difference in many communities, provided they are given the right tools to navigate challenging times, sustain themselves in crisis, scale and ultimately attain success.
By Kari Tukur, Vice President, Products, Sub Saharan Africa, Mastercard
