Providing MSMEs with digital financial solutions to grow businesses and Nigeria’s economy

Micro, Small and Medium-sized Enterprises (MSMEs) are the lifeblood of Nigeria’s economy, contributing significantly to employment, innovation, and economic growth. Nigeria is home to over 36.9 million MSMEs, comprising 96.7% of all businesses in Nigeria. However, these businesses need relevant, affordable, and accessible digital financial solutions for them to reach their full potential and drive the country’s development. The time has come for Nigeria to recognize the transformative power of these solutions and the enormous impact they can have on the growth of MSMEs and the overall economy.

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A recent Mastercard study, ‘The Digital SME: How Are Small and Medium Enterprises in the Middle East and Africa Embracing a Digital Future?’ provides valuable insights into the evolving landscape of MSMEs in the Middle East and Africa (MEA), including Nigeria. The fact that MSMEs are aware of the many advantages of digitization is one of the study’s most compelling findings. For Nigerian MSMEs, digitalization is a useful tool that can improve daily operations, spur development, and promote financial inclusion.

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MSMEs need affordable, easily accessible digital solutions

MSMEs must have access to and be able to afford digital financial solutions to benefit from them. Previously, MSMEs had restricted access to financial services however the introduction of digital financial solutions has removed these restrictions, with even the most remote MSMEs now having access to financial services.

We take great pride in our active support for initiatives in Nigeria aimed at fostering financial inclusion. Through strategic partnerships with local banks, we have made digital payments more affordable and accessible for MSMEs, even in remote areas. Our recent collaboration with First City Monument Bank (FCMB) and Netplus introduces a game-changing contactless payment solution. Now, merchants can accept payments with their Android smartphones or tablets, eliminating the need for separate hardware Point-of-Sale (POS) devices. This innovation simplifies business transactions, reduces costs, and empowers businesses across Nigeria. Tap on Phone works by enabling the device’s Near Field Communication (NFC) capabilities, allowing it to communicate with a customer’s contactless payment card. The customer simply taps their card on the merchant’s smartphone or tablet, and the payment is processed through the Mastercard network.

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We need to work together to create a bigger impact

To make these digital financial solutions a reality for MSMEs, collaboration and innovation are key. Financial institutions, fintech companies, and regulators must work together to create an enabling environment that fosters innovation and competition in the digital financial space.

Collaboration and innovation are at the heart of Mastercard’s approach to empowering MSMEs in Nigeria. We have partnered with local fintech startups and telcos to harness innovative technologies and provide cutting-edge digital financial solutions. These collaborations have led to the development of innovative payment systems and financial management tools that cater specifically to the needs of Nigerian MSMEs.

We have opened access to digital financial services on a large scale partnering with telcos. We are leading the way in a rapidly evolving mobile money market, working closely with telcos and Mobile Network Operators (MNOs), retailers and e-tailers, and traditional and non-traditional financial institutions to enable financial access for millions of consumers and merchants. We have partnered with Airtel to enable over 100M Airtel consumers across 14 markets in Africa and the Middle East with Virtual card and QR Payment capability and onboarding over 100k SMEs as merchants on QR. We teamed up with MTN, a mobile network operator in Africa, to bring more digital services to MTN’s platform.

Mastercard is dedicated to Empowering Every Business Everywhere by leveraging its innovation and solutions beyond payments to help small and medium enterprises get paid, get capital, and get digital – safely and securely – wherever they are.

Financial and digital inclusion is critical to the socio-economic success of the African continent, and we know that achieving this, at the scale Africa needs, is not a solo project. This is why we are partnering with a number of private companies, government institutions and development agencies to develop and scale locally relevant solutions, build stronger payment platforms, improve financial literacy, and empower even the smallest businesses.

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Growth is achievable

MSMEs in Nigeria contribute over 45% to the country’s GDP and they account for over 80% of employment in Nigeria. MSMEs are therefore critical for economic development so it is important for us to encourage their growth. We need to work together to help more MSMEs survive past their fourth year by ensuring they have access to finance for capital and operational demands, have the technological support they need to overcome market challenges, and make it easier for them to do business. If we get that right, I do believe that 7.5% growth is achievable for Nigeria’s economy.

Momoh, country manager and area business head, West Africa, Mastercard.