By Jeph Ajobaju, Chief Copy Editor
Confidence has returned to Small and Medium-Sized Enterprises (SMEs) in Nigeria with 81 per cent of them optimistic about the next 12 months compared to a regional African average of 74 per cent in SME Confidence Index.
Research by Mastercard, payments technology leader, identified key areas with the greatest potential for growth post-pandemic, as one in 2 SMEs project an increase in revenues by the second half of 2022.
The inaugural Mastercard Middle East and Africa (MEA) SME Confidence Index also found 78 per cent of SMEs in Nigeria project revenues that will grow or hold steady. Over half (56 per cent) project an increase.
Access to credit, digital payments
The report, published by Nairametrics, shows that as many regional economies gradually enter the normalisation and growth phase, and social restrictions continue to ease, SMEs in Nigeria identify the top drivers of growth as
· Accepting digital payments (75 per cent)
· Easier access to credit (72 per cent)
· Doing business internationally and digitising operations (72 per cent)
This highlights the opportunities for small businesses that arise from both internal transformation as well as industry regulations and trends, according to the research.
Mastercard says a key focus for it is making sure that SMEs have all the support they need to go digital and grow digital.
The company works with various stakeholders, including the government and banking institutions, to create opportunities for Nigeria’s 41 million Micro, Small, and Medium-Sized Enterprises (MSMEs).
Collectively, they contribute about 50 per cent to Gross Domestic Product (GDP), although this share could grow given that only 23 per cent of females operate formal SME businesses in Nigeria.
Mastercard has pledged $250 million and committed to connect 50 million MSMEs to the digital economy by 2025 using its technology, network, expertise and resources to help build a more sustainable and inclusive digital economy.
Mastercard is also focused on connecting 25 million women entrepreneurs. For many small businesses, reducing their dependence on cash through digital payments acceptance, plays a major factor in being able to get paid and maintain revenues.
“Small businesses have faced big challenges over the past year, but one of the most important things they can do for their own growth and in terms of future-proofing their business, is to prioritise digital payments acceptance,” said Ebehijie Momoh, Mastercard Area Business Head, West Africa.
“It is extremely encouraging to see that Nigerian businesses are recognising this and understanding the role that safe, secure and simple digital payments can play as they tackle the year and decade ahead with renewed optimism.
“At Mastercard, we are committed to keep SMEs connected to the tools they need to create new connections and sustainably grow commerce.”
Cost of business, PPP as engine for growth
What is the main thing that keeps you up at night? they were asked.
Up to 54 per cent of SMEs in Nigeria said maintaining and growing their business is their top issue.
Some 55 per cent identified the rising cost of doing business as one of their concerns over the next 12 months, 53 per cent cited the need for easier access to capital and funding.
Private sector partnerships (50 per cent) and government-led initiatives (52 per cent) were identified as having the biggest potential to positively impact SMEs and the wider Nigeria.
As consumer trends evolve in a post-pandemic world, businesses must adapt and prepare for the future.
Mastercard’s Economic Outlook 2021 estimated that 20-30 per cent of Covid-19 related surge in e-commerce would be a permanent trend in the share of overall retail spending globally.
Recent studies from Mastercard also show that over three in four Nigerian consumers (84 per cent) say they would shop at small businesses, if they offered more payment options
Some 81 per cent say they are more excited to shop at retailers that offer the latest payment methods, and the same 81 per cent say they would be more loyal to retailers who offer multiple payment options.