Small and medium enterprises (SMEs) in Kenya are actively adopting digital payments, leveraging technological advancements, and forming strategic collaborations to enhance growth and resilience, as highlighted in the third edition of the Mastercard SME Confidence Index.
With 91 per cent of SMEs in Kenya adopting digital payments, businesses are enhancing efficiency, improving customer experiences, and strengthening financial stability. This shift toward digitalization is reshaping SME operations, with many prioritizing secure payment solutions and broader financial inclusion to stay competitive in a rapidly evolving market.
“Small and medium enterprises are the backbone of economies, driving innovation, employment, and resilience. As digital transformation accelerates, SMEs are unlocking new opportunities through digital payments and financial inclusion. Their ability to adapt and grow in a rapidly evolving business landscape reflects the strength of an ecosystem that prioritizes access to finance, digital enablement, and sustainable growth,” said Dimitrios Dosis, president Eastern Europe, Middle East and Africa, Mastercard.
“As SMEs in Kenya continue to embrace digital transformation, access to secure payments, financial services, and strategic partnerships remains key to their success. At Mastercard, we are committed to equipping businesses with the tools and solutions they need to grow, adapt, and thrive in an increasingly digital economy,” said Mark Elliott, division president, Africa, Mastercard.
Digital payments at the core of SME expansion
Kenyan SMEs are increasingly recognizing the benefits of cashless transactions in driving operational efficiency and financial stability. Business owners cite reduced cash handling, smoother supplier payments, and faster transactions as key advantages of digital adoption.
Looking ahead, 97 per cent of SMEs plan to offer simple, seamless, and user-friendly payment methods to customers, while 95% aim to accept digital payments across multiple channels. Additionally, 70% are focused on ensuring safe and cyber-secure payment processing, reflecting the growing emphasis on secure digital financial ecosystems.
Focus on growth, cybersecurity, and financial access
While many SMEs anticipate maintaining or increasing their revenue, challenges such as rising costs of goods and services (71%) and inflation (68%) persist. To navigate these hurdles, over three-quarters of SMEs prioritize access to credit, with 40% seeking financing to expand their businesses and 21% aiming to maintain daily operations.
The emphasis on digital transactions has also heightened the focus on cybersecurity, with many businesses prioritizing digital security measures. Furthermore, SMEs recognize the importance of private sector partnerships and government initiatives in providing greater financial access, viewing these collaborations as crucial for long-term success.
Optimism amid challenges
Despite facing challenges, 66% of Kenyan SMEs expect to achieve the same or higher revenue this year compared to last, demonstrating resilience and adaptability. To support their growth, SMEs identify key areas needing assistance, including digitizing their businesses to meet changing customer needs (95%), supporting and upskilling their teams (95%), and accessing a wider range of financial services (95%).
Through strategic collaborations, Mastercard is dedicated to supporting Kenyan SMEs in achieving their growth objectives. In September 2024, Mastercard partnered with Safaricom, Kenya’s leading network operator, to enable 636,000 Kenyan merchants to accept digital payments globally via QR codes and NFC terminals, aiding in digitalization.
Additionally, recognizing the need for credit access, the Mastercard Foundation Fund for Resilience and Prosperity, announced in April 2024, is a $126 million grant program targeting Kenyan agribusinesses and digital economy SMEs, offering $500,000 to $2.5 million in funding alongside technical assistance.
Mastercard remains committed to supporting SMEs in Kenya by leveraging its extensive network, cutting-edge technology, and strategic collaborations. By working with governments and private sector partners, the company continues to lead efforts in driving financial inclusion and supporting small businesses as they navigate evolving commercial landscapes.
