61% of South African SMMEs Plan for Growth – Mastercard Index

  • In the midst of the COVID-19 pandemic, six in 10 SMMEs in South Africa anticipate growth and are proactively planning for the future
  • Upskilling staff for the future, access to data, analytics and insights, and digitising business operations offer highest growth potential for SMMEs

As the COVID-19 pandemic continues to put pressure on Small, Medium and Micro-Enterprises (SMMEs) financially and operationally in South Africa, six in 10 business owners say they are proactively planning for and anticipating growth in the next year. This is according to the Mastercard SME Index, which surveyed 300 SMMEs in South Africa between April and mid-May 2021.

While the majority (84%) of South African SMMEs say that the pandemic has negatively impacted their revenue, looking forward however, 79% are projecting that their earnings will either hold steady or grow in the next year.

SMMEs in South Africa identified ‘upskilling staff for the future’ (58%) as the top area that offers the highest growth potential for their businesses, closely followed by ‘better data, analytics and insights’ (57%).

‘Digitising business operations, sales and admin’ (53%) came in as the third driver, followed by ‘the acceptance of digital payments across multiple channels’ (48%). This omni-channel approach is an important consideration for all businesses as last month’s New Payment Index found that 95% of South African consumers will consider using at least one emerging payment method in the next year, varying from contactless, QR codes, biometrics or cryptocurrency. In an increasingly connected world, the ability to ‘do business and transact internationally’ (48%) rounded out the top five drivers.

Ensuring that SMMEs have the support they need to go digital and grow digitally is a key focus for Mastercard. The company works closely with various stakeholders including the government and banking institutions to create solutions that will assist in the growth of SMMEs, which represent 98% of all businesses in South Africa.

Mastercard has pledged $250 million and committed to connect 50 million micro, small small and medium size businesses globally to the digital economy by 2025 using its technology, network, expertise, and resources in support of the company’s goal of building a more sustainable and inclusive digital economy. As part of these efforts, Mastercard is focused on connecting 25 million women entrepreneurs. For many small businesses, reducing their dependence on cash through digital payments acceptance has played a major role in being able to get paid and maintain revenues.

“SMMEs in South Africa continue to demonstrate strength and agility, despite Covid-19 where they’ve had to navigate lockdowns, restricted supply chains, and the changing habits of an evolving consumer. While several challenges remain, it is encouraging to see how SMMEs are transforming the way they do business to benefit from the secure technology and convenient payments solutions that are currently shaping commerce. At Mastercard, our mission is to connect SMEs to the tools, training, and insights they need to survive and thrive now and in the future,” says Suzanne Morel, Country Manager for Mastercard, South Africa.

When asked about what keeps them up at night, 39% of SMMEs in South Africa mentioned being ‘able to maintain and grow their business’, while 29% are worried about staying in business or going bankrupt. Looking ahead at the next year, three-quarters (76%) identified the rising cost of doing business, 63% cited red tape and regulations, and 51% mentioned getting access to capital as their biggest business concerns.

Private sector partnerships (84%), international government or business collaborations (56%) and government-led initiatives (44%) were identified as having the biggest potential to positively impact SMMEs and the wider South African market.

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