72% of SMEs in the Middle East and North Africa are optimistic about revenue expectations

The second edition of the SME Confidence Index in Eastern Europe, the Middle East and Africa from MasterCard revealed the optimism of SMEs in the Middle East and North Africa region regarding revenue expectations for 2023, especially after their success in facing many difficult circumstances imposed by the Covid-19 pandemic. The business of these companies will return to prosperity during the post-pandemic period.

The impact of the pandemic on the business of small and medium enterprises

The first edition of the SME Confidence Index for 2021 addressed the impact of the pandemic on the business of SMEs operating across categories such as sectors, products and services, and touched on the efforts made by these companies to keep pace with the digital future. The second edition of the index revealed an increase in the confidence of small and medium-sized companies throughout the Europe, Middle East and Africa region regarding business growth, and indicated that business digitization represents the most prominent opportunity for these companies to achieve growth.

Corporate recovery

Companies recover from the consequences of the pandemic and return to the growth stage. The index showed that 72% of small and medium-sized companies in the Middle East and North Africa region expect to achieve similar or higher revenues during the next 12 months, and Qatar takes the lead in companies’ optimism about revenues, as 88% expect of SMEs in Qatar report that revenues will grow or remain stable, followed by the Kingdom at 85% and then the UAE at 80%.

SMEs in Saudi Arabia are the most optimistic in the MENA region about business growth this year, followed by Qatar and the UAE.

Employee training and skills improvement

More than 7 out of every 10 SMEs in the Middle East and North Africa region expressed optimism about business growth this year compared to 2022, as 93% of SMEs in the Kingdom of Saudi Arabia are optimistic about business growth in 2023, followed by Qatar with a percentage 82% and the UAE 74%.

The index highlighted the three most important areas of support that SMEs in the Middle East and North Africa region are looking to obtain: employee training and skills improvement (93%), Having access to a wider range of financial services (92%), and having better communications infrastructure (91%).

Digital payment solutions are becoming increasingly widespread and popular in the MENA region, with 85% of consumers in the region using at least one new payment method over the past year. MasterCard serves as a trusted partner to governments to drive digital transformation efforts for small businesses, promote economic equality and achieve inclusive prosperity. The company pledged to connect 50 million small and medium businesses globally to the digital economy by 2025.

Other areas of support cited by SMEs include access to better data and insights, expert guidance and supervision, as well as the ability to access a wider range of financial services.

The use of multiple payment channels is one of the most prominent growth drivers

SMEs in the MENA region identified accepting digital payments across multiple channels (92%), digitizing business processes (91%), and accessing training, support and development (90%) as key drivers of their business growth.

Ease of access to financing is a key factor for growth in the Middle East and North Africa region, as 92% of small and medium-sized enterprises in Egypt find access to capital and resources essential to maintaining the upward trajectory of their business through 2023, and the International Finance Corporation (IFC) estimates the value of the financial gap. Total financing for SMEs in the Middle East and North Africa region ranges between $210 to $240 billion.

More than half of SMEs in the MENA region agreed that the cost of doing business is high.

As markets witness an increasing shift toward a dynamic economy, SMEs continue to face numerous challenges. These include insufficient access to credit (24%), employee retention issues (46%), and declines in the cost of goods and services (57%), and the ongoing repercussions of the pandemic in some countries (64%), and more than 53% of the SMEs surveyed in the Middle East and North Africa region expressed concern about these challenges that are likely to contribute to the high cost of doing business over the coming year.

MasterCard seeks to employ its extensive network, advanced technologies, and global partnerships to help small and medium-sized companies and enable them to keep pace with the rapid changes taking place in the commercial environment and new consumer patterns. The company works to develop partnerships and cooperative efforts with government and private agencies to enhance financial inclusion. It also looks forward to motivating and educating consumers and merchants about the importance of supporting small businesses and their role in the process of economic development.