South African SMEs, which have been thumped by lockdowns and as a result has had to adapt to how they do the business, are leading digitalisation in Africa and the Middle East, according to a new report from Mastercard. Nine of ten respondents in the country have some presence on social media or have a website, according to a Mastercard white paper titled ‘The Digital SME: How Are Small and Medium Enterprises in the Middle East and Africa Embracing a Digital Future?”
It is an in-depth follow-on study from the data-rich Mastercard MEA (the Middle East and Africa) SME Confidence Index 2021. The paper reveals that 64% of South African SMEs say that they believe e-commerce will have a positive impact on their business. “Over three-fourths (79%) of South African SMEs surveyed accept online payments, 48% accept cards, and 41% accept mobile payments,” it reads.
Also, six in 10 business owners in South Africa said they expected to grow in 2022 and we’re ensuring that this growth would be supported in various ways. These included upskilling their staff, gathering better data, digitising business operations and accepting digital payments across multiple channels.
“According to the index, 88% of South African SMEs say digital and online payments are important to helping them grow their business both now, and in the future,” Mastercard revealed. “Countless payment (technologies have) also been identified as a safer and more efficient way to transact, and another 75% have seen a rise from their customers who prefer to transact digitally since the pandemic.”
Gaurang Shah, who is the head of products for Mastercard Middle East and Africa, said that an empowered SME sector was a growth engine for the economic development in these regions. “But the challenges are many, the chief being access to funding and digitalisation which have emerged as huge needs,” Shah said.
“The Mastercard MEA SME Confidence Index found that 89% of SMEs in the region see potential in digitalising their business, which is encouraging for everyone within the digital economy.” Mastercard MEA market development vice president Amnah Ajmal said that connecting businesses to one another within the ecosystem and helping them grow and prosper, were key objectives for Mastercard.
“For a neighbourhood vendor or store, there are simple solutions to reduce the risk and cost of cash, and open up sales to more customers,” Ajmal said. Other benefits identified in the document included faster access to revenues (85%) and the ease of not handling or processing cash (79%).
Since 2018, digitalisation has progressed globally. But it has seen higher traction among larger corporations and financial institutions than SMEs.