Kenya’s small and medium enterprises (SMEs) remain optimistic about their future despite inflationary pressures and a challenging economic environment, according to the latest Mastercard SME Confidence Index.
The study found that 66 percent of Kenyan SMEs are confident about their business outlook, while 70 percent expect their revenues to grow over the next 12 months.
The report attributes this optimism to the widespread adoption of digital payment technologies, particularly mobile money, which continues to support business growth and resilience.
The Mastercard SME Confidence Index is a multi-market study that assesses the sentiment, priorities, and growth outlook of SMEs across Eastern Europe, the Middle East, and Africa.
Kenya’s long-standing leadership in mobile money was reflected in the findings, with 95 percent of SMEs reporting that they accept mobile payments.
Mobile transactions account for 41 percent of all transaction volumes, surpassing card payments at 29 percent and online payments at 39 percent.
According to the report, the widespread use of digital payment systems has enabled businesses to remain agile and better serve customers through convenient and flexible payment options.
The SMEs are some of the most digitally fluent on the continent, and their optimism reflects a wider story unfolding across Africa.
“Businesses here are showing the rest of the region what is possible when entrepreneurs embrace digital tools and build on them with ambition,” said Gabriel Swanepoel, Division President for Africa at Mastercard.
He noted that Mastercard is committed to supporting businesses with payment solutions, insights, and access to finance to help them sustain growth.
The study further revealed that 44 percent of Kenyan SMEs sought external financing over the past year, with the majority seeking credit to expand their operations rather than simply sustain them.
Mastercard Senior Vice President and Country Manager for East Africa, Shehryar Ali, said SMEs remain the backbone of Kenya’s economy and continue to demonstrate resilience despite economic headwinds.
“Kenyan businesses have built one of the most advanced mobile payment cultures in the world and are now ready for the next step: turning everyday transactions into data, insights, and access to capital that support growth,” he said.
Despite inflation being cited by 77 percent of respondents as the biggest challenge affecting their operations, confidence in future growth remains high. Technological advancement and digitalization were identified by 62 percent of SMEs as key drivers of business growth.
The report indicates that SMEs are increasingly seeking tools that go beyond payment acceptance. About 80 percent identified simple and user-friendly payment systems as critical to future growth, while 70 percent cited access to data, analytics, and business insights as essential for improving customer engagement and competitiveness.
The study also highlights growing demand for business financing. Of the SMEs that sought external funding, 46 percent were looking for capital to expand their businesses, compared to 13 percent who sought financing to maintain operations.
Mastercard said there is an opportunity to increase access to structured credit and business-focused financial products to help SMEs meet their growth ambitions.
To support SMEs, Mastercard is partnering with several financial institutions and technology providers in Kenya. Key initiatives include a collaboration with Safaricom to enhance payment acceptance across the M-PESA ecosystem, supporting more than 636,000 merchants.
The company has also expanded its Tap to Pay technology, enabling smartphone-based payment acceptance, and introduced tokenization-based wearable payment solutions to improve transaction security.
Other partnerships involve KCB Bank, I&M Bank, NMB Bank, and Diamond Trust Bank (DTB), aimed at expanding digital payments and access to financial services.
According to Mastercard, these initiatives have contributed to a 45 percent increase in its acceptance network across Africa, enabling more SMEs to participate in the digital economy.
Kenya’s SMEs are well positioned to leverage digital innovation, strategic partnerships, and improved access to financial services to drive future growth and contribute to a more inclusive digital economy.
by James Mburu
