‘Inflation accounts for 77 per cent of SMEs’ challenges’

Small and medium enterprises (SMEs) in Nigeria are leveraging digital payments, innovation, and partnerships to expand their reach and strengthen business operations, according to the third edition of the Mastercard SME Confidence Index.

The index however showed that inflation accounted for 77 per cent of the challenges battling small businesses in the country, disclosing that 99 per cent of SMEs in Nigeria are now accepting digital payments, with businesses now capitalising on cashless transactions to enhance efficiency, improve customer experience, and build financial resilience.

Mastercard noted that this digital shift is enabling SMEs to grow in an evolving business environment, with many prioritising secure payment solutions and financial inclusion initiatives.

President, Eastern Europe, Middle East and Africa, Mastercard, Dimitrios Dosis, said small and medium enterprises are the backbone of economies, driving innovation, employment, and resilience, saying 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,” Dosis stated.

Division President, Africa, Mastercard, Mark Elliott, observed that Nigerian SMEs are demonstrating remarkable adaptability and foresight by leveraging digital payment solutions to drive economic transformation.

Elliot, who posited that their positive revenue outlook highlighted a commitment to harnessing technology for sustainable growth, said “At Mastercard, we are dedicated to empowering these businesses with innovative digital tools, fostering strategic partnerships, and supporting their journey toward greater financial inclusion and security”.

According to Mastercard, as Nigeria’s economy embraces digitalisation, SMEs are recognising the advantages of cashless transactions in driving business efficiency. Many business owners highlight ease of managing payments, seamless supplier transactions, and reduced reliance on cash handling as key benefits. Looking ahead, SMEs are focused on expanding their digital payment capabilities and ensuring seamless customer experiences to sustain their competitive edge.

Looking ahead, Mastercard said 73 per cent of SMEs plan to further expand their digital payment capabilities across various channels, and 70 per cent are focused on providing seamless, user-friendly payment experiences to customers to drive business improvement.

While most SMEs anticipate maintaining or increasing their revenue, they acknowledge cybersecurity, inflation and financial access as key areas influencing business growth. Strengthening digital security measures is a growing priority as businesses increase their reliance on online transactions.

Mastercard said many SMEs also emphasise the need for broader financial access, with business owners identifying private-sector partnerships, government-led initiatives, and international collaborations as key enablers for long-term success. This highlighted the growing role of collaboration in driving SME resilience and supporting businesses as they navigate an evolving financial landscape.

Access to credit remains a priority for over three-quarters of SMEs, with 47 per cent aiming to secure financing to grow their businesses and 27 per cent seeking capital to maintain daily operations.

In terms of optimism amid challenges, the international payment firm disclosed that while SMEs face challenges such as inflation (77 per cent) and rising costs of goods and services (75 per cent), a significant 78 per cent expect to achieve the same or higher revenue this year compared to last, signalling resilience and adaptability.

SMEs identify private sector initiatives or partnerships (56 per cent), government-led initiatives (47 per cent), and international collaborations (41 per cent) as key factors that will positively impact their operations this year.