Small and medium enterprises (SMEs) in Kenya are rapidly adopting digital payments, leveraging technology and strategic partnerships to fuel growth and build resilience, according to the third edition of the Mastercard SME Confidence Index.
A remarkable 91% of Kenyan SMEs have embraced digital payments, enhancing operational efficiency, improving customer experiences, and bolstering financial stability.
The digital transformation is reshaping SME operations, with a strong focus on secure payment solutions and financial inclusion to stay competitive in a dynamic market.
“Small and medium enterprises 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,” said Dimitrios Dosis, President for Eastern Europe, Middle East, and Africa at Mastercard.
Mark Elliott, Division President for Africa at Mastercard, added, “As SMEs in Kenya continue to embrace digital transformation, access to secure payments, financial services, and strategic partnerships remains key to the success of these businesses.
At Mastercard, we are committed to equipping businesses with the tools and solutions they need to grow, adapt, and thrive in an increasingly digital economy.”
Kenyan SMEs are increasingly recognizing the benefits of cashless transactions, which drive operational efficiency and financial stability. Business owners highlight reduced cash handling, smoother supplier payments, and faster transactions as key advantages of digital adoption.
Looking ahead, 97% of SMEs plan to offer seamless and user-friendly payment methods, while 95% aim to accept digital payments across multiple channels. Additionally, 70% are focused on ensuring secure payment processing, reflecting a growing emphasis on safe digital financial ecosystems.
While many SMEs anticipate maintaining or increasing their revenue, challenges such as rising costs of goods and services (71%) and inflation (68%) persist. To navigate these hurdles, over three-quarters of SMEs prioritize access to credit, with 40% seeking financing to expand their businesses and 21% aiming to maintain daily operations.
The emphasis on digital transactions has also heightened the focus on cybersecurity, 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.
Despite facing challenges, 66% of Kenyan SMEs expect to achieve the same or higher revenue this year compared to last, demonstrating resilience and adaptability. To support their growth, SMEs identify key areas needing assistance, including digitizing their businesses to meet changing customer needs (95%), supporting and upskilling their teams (95%), and accessing a wider range of financial services (95%).
Through strategic collaborations, Mastercard is dedicated to supporting Kenyan SMEs in achieving their growth objectives. In September 2024, Mastercard partnered with Safaricom to enable 636,000 Kenyan merchants to accept digital payments globally via QR codes and NFC terminals, aiding in digitalization.
Additionally, the Mastercard Foundation Fund for Resilience and Prosperity, announced in April 2024, is a $126 million grant program targeting Kenyan agribusinesses and digital economy SMEs, offering funding alongside technical assistance.
