After facing unprecedented changes in the wake of the COVID-19 pandemic, Small and Medium Enterprise (SME) confidence in MENA is on the rise, according to the latest research by Mastercard.
The inaugural Mastercard Middle East and Africa (MEA) SME Confidence Index found 81% of SMEs in MENA are optimistic about the next 12 months. In fact, 77% are projecting revenues that will either grow or hold steady. Over half (56%) are projecting an increase.
Access to data, digitalization, and skills key for future growth
As many regional economies gradually enter the normalization and growth phase, and social restrictions continue to ease, small and medium-sized businesses in MENA have identified better data and insights (42%), easier access to credit (41%), and upskilling staff (40%), as the top three drivers for growth. This highlights the opportunities for small businesses that arise from both internal transformation as well as industry regulations and trends.
“The results from the SME Confidence Index clearly indicates an upliftment in sentiment that most businesses across MENA are feeling today. This is a positive sign for the region on its journey to economic recovery, and a clear indication of the power of technology in helping enable this growth,” said Khalid Elgibali – Division President, MENA, Mastercard.
The challenge to maintain and grow business a key concern, whilst public and private partnerships seen as an engine for growth.
When asked about the main thing that keeps them up at night, 50% of SMEs in MENA mentioned the challenge to maintain and grow their business was their top issue. Looking at concerns over the next 12 months, over half (53%) identified the rising cost of doing business, while 39% cited access to capital. Private sector partnerships (58%) and government-led initiatives (53%) were identified as having the biggest potential to positively impact SMEs and the wider MENA market.
“With rising costs among the key concerns of SMEs in MENA, it is crucial that we prioritize a safe and secure digital economy that can keep commerce going, enable healthy cash flows, and support access to capital by virtue of a digital track record. A strong digital economy benefits everyone in multiple ways, from SMEs being able to grow their customer base through eCommerce, to consumers having a choice of payment methods,” added Elgibali.
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% of the COVID-19 related surge in e-commerce would be a permanent trend in the share of overall retail spending globally. Furthermore, recent studies from Mastercard showed that 74% of consumers in MENA are shopping more online than they did since the start of the pandemic and 95% of the region’s shoppers would consider making a purchase with an emerging payment technology over the next year.