Mastercard SME Confidence Index: 80% of SMEs in South Africa project similar or increased revenue in 2023

• Future growth will be driven by training and upskilling staff, better data, analytics and insights and digitizing business
• Three out of four SMEs surveyed in South Africa are concerned about the rising cost of doing business

Johannesburg, South Africa; 26 September 2023 – From surviving to thriving in the post-COVID world, small and medium enterprises (SMEs) in South Africa are projecting similar or increased revenues in 2023. These are the findings of the second edition of the Mastercard Eastern Europe, Middle East and Africa (EEMEA) SME Confidence Index.

The 2021 inaugural SME Confidence Index delved into the impact of the pandemic on SMEs across sectors, products and services, and how they are embracing a digital future. As a continuation, the second edition of the survey reveals that while 91% of medium-sized businesses across South Africa are confident about business growth, omnichannel payments present the biggest opportunity.

As companies recover from the pandemic and return to the normalization and growth phase, the research shows that 86% of SMEs in South Africa are concerned about rising cost of doing business in 2023 and 79% about inflation.

More than half of SMEs in South Africa are optimistic about the future

 While medium and large sized businesses are extremely confident about the future, the survey reveals that more than half of micro and small businesses are optimistic about the next 12 months.

The survey highlights top three areas for support required by SMEs in Africa –training and upskilling staff (91%), digitizing businesses (88%) and access to a wider range of financial services (88%).

Majority of SMEs (88%) are also looking for business advisory support, education and a network of mentors. Over 80% would also like to explore e-commerce opportunities and accept digital payments.

Access to omnichannel payment services among top drivers of growth

SMEs in South Africa have identified accepting omnichannel digital payments (73%), digitizing business operations (87%) and access to training and development support (84%) as the main drivers of growth.

Adoption of digital payment solutions is on the rise in South Africa, with 95% of consumers in South Africa having used at least one emerging digital payment method in 2022. Consumers are relying on digital tools to accomplish everyday financial tasks, with 71% of South Africans using fintech for five or more tasks, with banking and paying bills emerging as top use cases.

Most consumers know about open banking and are using it to pay their bills, do their banking, secure or refinance loans, and make BNPL payments.

Three out of four SMEs in South Africa are unanimous about the rising cost of doing business

As markets navigate an increasingly dynamic economic landscape, SMEs in South Africa continue to face a multitude of challenges. These include steep incline in the cost of goods and services (86%), long-term effects of the pandemic (71%) and insufficient access to credit (43%).

“Across the region, micro, small and medium businesses have quickly adopted digital payment solutions over the last few years. The SME Confidence Index survey indicates that optimism for business growth is steadily increasing year-on-year.  Focusing on consumers, we have also noted their acceptance of open banking as a tool they have incorporated into their daily banking activity. At Mastercard, we have been working closely with local stakeholders to develop value-added propositions including access to training, digital tools, credit and resources that help SMEs in the market grow and scale,” said Gabriel Swanepoel, Country  Manager at Mastercard, Southern Africa.

Mastercard leverages its extensive network, state-of-the-art technology, and global partnerships to help SMEs to adapt to changing commercial environments and new spending patterns. The company works with governments and the private sector to build synergies that advance financial inclusion and motivates consumers and merchants to support small businesses.

How Mastercard continues to assist small businesses develop their businesses

In South Africa, 81% of respondents shared their concerns for the rising costs of doing business in the previous year. To help small businesses address this issue, the Mastercard Easy Savings Specials solution will help alleviate the concerns of small businesses owners pertaining to saving. The Mastercard Easy Savings Specials is a global redemption-based merchant offers program that enables SMEs to access a wide range of offers. The program also offers small businesses with personal and business savings experiences. Whether small businesses are looking to take their business to the cloud, unleash business potential or power up their logistics, there is an offer to help them save. As small businesses continue to grow, to further offer support to these businesses, Mastercard has committed to addressing pain points around slow and inefficient payment methods, limited access to working capital, and lack of digitalization. One of the ways Mastercard is at the service of small businesses is by assisting them to save.

Over and above providing support for small businesses to save, Mastercard also supports small businesses through ‘The Entrepreneur’s Odyssey.’ A program launched by the Mastercard Academy, and is a first-of-its kind digital education platform that brings together a range of world-class academic and business resources to help small businesses learn and thrive.

Through the Mastercard Digital First Program, small businesses can have a complete digital experience through innovative payment methods. Digital First provides the customer with a 100% digital product: no paperwork, branch visits or snail mail. Customers can open a bank account immediately by uploading identification, apply for a card, activate it, and use it for all their payment needs from their mobile devices. A physical visit to a branch then becomes an optional extra.