Mastercard: 73% of SMEs in Egypt bullish on future growth

73 percent of small and medium-sized enterprises (SMEs) in Egypt are optimistic about the next 12 months, according to the latest research by Mastercard.

The inaugural of Mastercard Middle East and Africa (MEA) SME Confidence Index found that after facing unprecedented changes in the wake of the COVID-19 pandemic, SME confidence in Egypt is on the rise. 85 percent are projecting revenues that will either grow or hold steady. Over two-thirds (68 percent) are projecting an increase.

Access to data, digitalisation and skills key for future growth

As many regional economies gradually enter the normalisation and growth phase, and social restrictions continue to ease, SME businesses in Egypt have identified access to training and development support (47 percent), better data and insights (45 percent) and accepting digital payments, 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, MasterCard added.

Making sure that SMEs have all the support they need to go digital and grow digital is a key focus for Mastercard. The company works the government, financial organisations and the wider business community to create opportunities for Egypt’s 1.7 million small businesses. Earlier this year, Egypt’s central bank made it easier for SMEs to access capital by encouraging banks to raise their share of loans to MSMEs.

Mastercard has pledged $250 million and committed to connect 50 million micro, small and medium-sized 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 factor in being able to get paid and maintain revenues.

“SMEs are the engines of the economy, and despite the challenges they’ve faced because of the pandemic, many of them have been able to successfully access countless digital opportunities in our new commercial landscape. As a dedicated technology partner, Mastercard continues to offer SMEs innovative tools that keep them connected to the digital economy, so they can thrive and sustainably advance their business,” Mohamed Assem, country manager for Mastercard Egypt, said.

When asked about the main thing that keeps them up at night, 43 percent of SMEs in Egypt mentioned the challenge to maintain and grow their business was their top issue. Looking at concerns over the next 12 months, half (50 percent) identified the rising cost of doing business, while 46 percent cited access to capital. Private sector partnerships (57 percent) and government-led initiatives (52 percent) were identified as having the biggest potential to positively impact SMEs and the wider Egypt market.

“The main challenge facing businesses today are focused around achieving growth and financial stability in the face of rising costs of operations and capital. Technology however has proven to be a powerful solution to these concerns.

“By using digital tools and payments, a small business can easily establish an online presence, expand its reach, acquire new customers via e-commerce, as well as gain access to extended credit lines through digital banking.

“As the partner of choice to multiple key players in the Egyptian financial services sector, we are committed to creating a smart and seamless digital economy that allows any business – of any size – to grow sustainably and succeed in today’s ever-growing competitive business landscape,” Assem added.

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 percent of the COVID-19 related surge in e-commerce would be a permanent trend in share of overall retail spending globally. Furthermore, recent studies from Mastercard showed that 72 percent of Egyptian consumers are shopping more online than they did since the start of the pandemic and 94 percent of Egyptian shoppers would consider making a purchase with an emerging payment technology over the next year.