After facing unprecedented changes in the wake of the COVID-19 pandemic, Small and Medium Enterprise (SME) confidence in the UAE is on the rise, according to the latest research by Mastercard.
The inaugural Mastercard Middle East and Africa (MEA) SMEConfidence Index found that 88% of SMEs in the UAE are optimistic about the next 12 months. In fact, two-thirds (66%) are projecting revenues that will either grow or hold steady.
Access to funding, digitalization and skills key for future growth
As many regional economies gradually enter the normalization and growth phase, and social restrictions continue to ease, small and medium sized businesses in the UAE have identified easier access to funding (40%), acceptance of digital payments (34%) and training and upskilling staff (34%) 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.
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 closely with the government, financial organizations and the wider business community to create opportunities for the over 400,000 SMEs that operate within the UAE and provide employment for over 86% of the UAE workforce.
Mastercard has pledged $250 million and committed to connect 50 million micro, 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 factor in being able to get paid and maintain revenues.
“Starting a business is one of the most ambitious and rewarding things one can do, and it’s great to see that confidence is returning to the UAE’s SME sector after a challenging period. The study highlights the potential of several key drivers of growth that small and medium businesses in the UAE rely on as they look towards an optimistic future. At Mastercard, we connect SMEs to the technologies, the network and the expertise they need to sustainably grow their businesses, collaborating to build prosperous and more inclusive economies,” said Girish Nanda, Country Manager, UAE and Pakistan, Mastercard.
The cost of business a key concern, whilst public and private partnerships seen as engine for growth
When asked about the main thing that keeps them up at night, 60% of SMEs in the UAE mentioned the challenge to maintain and grow their business was their top issue. Looking at concerns over the next 12 months, 61% identified the rising cost of doing business, while 38% cited the need for easier access to capital and funding. Private sector partnerships (57%) and government-led initiatives (53%) were identified as having the biggest potential to positively impact SMEs and the wider UAE market.
“Access, whether it is to growth, stability and financial support, stands out as the top concern that SMEs in the UAE face today. The fundamental benefit of a digital economy is that it eases access across these barriers. Whether it is the ability to sell online, acquire a larger customer base through eCommerce, or enable instant access to apply for or extend credit lines through digital banking, the digital economy works for everyone. At Mastercard, we work everyday with the diverse players in this financial ecosystem to transform this infrastructure and build a smart economy that enables access for businesses of all sizes,” added Nanda.
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% 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 73% of UAE consumers are shopping more online than they did since the start of the pandemic and 97% of UAE shoppers would consider making a purchase with an emerging payment technology over the next year.