There are a lot of challenges that hinder the growth and upscaling of SMEs in Africa, including lack of access to credit, which is the centre of it all.
Ngozi Megwa, Mastercard’s Senior Vice President, Digital Partnerships and Enablers, in Eastern Europe, Middle East and Africa, highlights that the issue of access to credit needs to be unpacked further. Speaking to CIO Africa, Ngozi said that the absence of tools that facilitate a digital footprint hinders SMEs from capturing inflows and maintaining a record of their outgoings. Consequently, when seeking loans from financial institutions, SMEs are perceived as high-risk customers, resulting in limited access to credit.
Recognizing the correlation between a digital footprint and access to credit, Ngozi emphasizes the importance of equipping SMEs with the necessary tools to facilitate trade and build a robust digital presence. Additionally, she stresses the significance of education and literacy in empowering SMEs to effectively manage and grow their businesses.
“Providing them with tools is one thing but there’s a whole piece around education and literacy which is equally important because it really equips these SMEs with what they need to turn their business into growth engines, which in turn grows the broader economy,” Ngozi explained.
Ngozi went further to talk about the role Mastercard is playing to address these challenges. She said that affordability has been a concern to a lot of these SMEs when they start to think about acquiring tools that will give them a digital footprint.
“From a technology standpoint, we do have a lot of low-cost digital acceptance tools. For example, tools that allows SMEs to accept digital payments using their mobile phones,” she noted, “As Mastercard, we equip them with the right tools to be able to accept and receive payment at a very low cost which enables them to build that digital footprint.”
Digital technology plays a pivotal role in expanding financial inclusion across Africa, particularly in underserved communities. Ngozi highlights the transformative power of technology, which helps SMEs overcome traditional barriers to growth. AI-driven personalization and loyalty platforms offer SMEs valuable insights, while data and AI play crucial roles in managing cyber risks and enabling seamless digital payments. By embracing technology, African SMEs can harness opportunities, experience agile growth, and sidestep infrastructure challenges.
Mastercard’s approach to financial inclusion is rooted in providing locally relevant initiatives that cater to the diverse cultures and economies of Africa.
Mastercard’s commitment to increasing financial inclusion and empowering SMEs in Africa is exemplified through its strategic partnerships, localized technology solutions, and investment in capability building. With the aim of driving economic growth and fostering digital transformation, Mastercard’s initiatives lay the foundation for a more inclusive and prosperous Africa.