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Small businesses in Kenya are banking on omnichannel payment solutions to remain competitive amidst the rising cost of doing business, a new survey by Mastercard says.

Leveraging a seamless shopping experience across all marketing channels, including in-store, mobile and online, some SMEs have reigned in their transaction costs, improved customer care experience and increased their market reach.

SMEs that have deployed the strategy have also realised improvement in their inventory management through provision of real-time visibility in stock levels, as well as the collection and analysis of data from multiple channels.

According to Shehryar Ali, the Mastercard Senior Vice President and Country Manager for East Africa and Indian Ocean Islands, the survey showed a rise in optimism for the next 12 months, improving to 66 per cent compared to 45 per cent last year.

Confidence Index

“The SME Confidence Index results are highly encouraging, as they reveal that Kenyan SMEs are optimistic about their business growth prospects with a notable focus on the transformative potential of digital payments,” Ali said.

Ali said 97 per cent of the SMEs surveyed believe that omnichannel payments present the biggest opportunity for them, followed by digitising business (96 per cent) and access to training and development support (95 per cent). 

Other factors contributing to business growth include training and upskilling staff (94 per cent), easier access to financial services and credit funding (93 per cent), better data, analytics and insights (91 per cent) and being able to transact internationally (83 per cent).

In Kenya, MSMEs face several growth challenges amongst them inadequate capital, knowledge and skills, limited market access and rapid changes in technology.

 addition, their growth prospects is also curtailed by rising inflation, effects of the Covid-19 pandemic, and rising cost of goods and services as some of the factors.

According to the survey, 73 per cent of MSMEs are concerned about the rising cost of doing business in 2023 and while 44 per cent regard lack of access to capital as a major concern. 61 per cent cited the lingering effects of the pandemic. 65 per cent said rising cost of goods and services was  impacting their business growth, while 52 per cent mentioned inflation as a key impediment.  

The study shows that 68 per cent of the SMEs project an increase of similar revenue in 2023. It also reveals that four out of 10 SMEs are concerned about paying back loans from banks and governments. Additionally, 23 per cent reckon that easy access to capital funding and red tape regulations (23 per cent) remains key challenges.   

Kenya has over 7.4 million SMEs employing approximately 14.9 million Kenyans in various sectors of the economy.   

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