Mastercard Report On Kenyan SMEs’ Digital Shift

Small businesses in Kenya are finding smart ways to adapt and grow, despite challenges like inflation and rising costs. Many are embracing digital payments and technology to make their operations more efficient and reach more customers.

Digital payments have become a lifeline for Kenyan Small and medium enterprises (SMEs), with 91 percent adopting cashless systems. Business owners say this shift helps reduce the hassle of handling cash, speeds up payments to suppliers, and improves financial security. Looking ahead, 97 percent of SMEs plan to offer simple, seamless payment methods, while 70 percent are focusing on ensuring secure payment systems.

“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,” said Dimitrios Dosis, President for Eastern Europe, the Middle East, and Africa at Mastercard.

Many SMEs in Kenya are turning to credit to help them grow or stay afloat. About 40 percent of business owners say they need financing to expand, while 21 percent are seeking funds to keep their operations running.

Partnerships with private companies and government initiatives are playing a key role in providing financial access. In April 2024, Mastercard launched a $126 million grant program under its Foundation Fund for Resilience and Prosperity. This initiative focuses on supporting agribusinesses and digital economy SMEs in Kenya, offering funding between $500,000 and $2.5 million, along with technical support.

Even with all the challenges, 66 percent of SMEs expect to maintain or increase their revenue this year. Business owners are focusing on digitizing their operations, upskilling their teams, and improving customer experiences. To support their growth, SMEs identify key areas needing assistance, including digitizing their businesses to meet changing customer needs 95 percent, supporting and upskilling their teams, 95 percent, and accessing a wider range of financial services at 95 percent.

Mastercard’s collaboration with Safaricom in 2024 is another example of support for SMEs. The partnership enabled 636,000 Kenyan merchants to accept global digital payments using QR codes and NFC terminals, making it easier for businesses to go cashless.

Kenyan SMEs are proving their resilience through creativity and determination. By embracing digital tools, seeking financial support, and forming strategic partnerships, they are finding ways to overcome challenges and look toward a brighter future.