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.

With 99% of SMEs in Nigeria now accepting digital payments, businesses are capitalizing on cashless transactions to enhance efficiency, improve customer experience, and build financial resilience. This digital shift is enabling SMEs to grow in an evolving business environment, with many prioritizing secure payment solutions and financial inclusion initiatives.

“Small and medium enterprises are the backbone of economies, driving innovation, employment, and resilience. 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,” said Dimitrios Dosis, president Eastern Europe, Middle East and Africa, Mastercard.

“Nigerian SMEs are demonstrating remarkable adaptability and foresight by leveraging digital payment solutions to drive economic transformation. Their positive revenue outlook highlights a commitment to harnessing technology for sustainable growth. 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,” said Mark Elliott, division president, Africa, Mastercard.

Digital payments at the core of SME expansion

As Nigeria’s economy embraces digitalization, SMEs are recognizing 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, 73% of SMEs plan to further expand their digital payment capabilities across various channels, and 70% are focused on providing seamless, user-friendly payment experiences to customers to drive business improvement.

SMEs focus on growth, cybersecurity, and financial access

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.

Many SMEs also emphasize 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 highlights 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% aiming to secure financing to grow their businesses and 27% seeking capital to maintain daily operations.

Optimism amid challenges

While SMEs face challenges such as inflation (77%) and rising costs of goods and services (75%), a significant 78% expect to achieve the same or higher revenue this year compared to last, signaling resilience and adaptability.

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

Through strategic collaborations, Mastercard aims to support Nigerian SMEs in achieving their growth objectives. For instance, in July 2023, Mastercard partnered with Alerzo, a leading Nigerian B2B e-commerce company, to digitize SMEs in the fast-moving consumer goods (FMCG) sector, making digital payments more accessible and efficient.

Recognizing the growing market need, Mastercard’s Product Express is helping Nigerian fintech launch card programs quickly and easily, enabling them to reduce their time to market and service customers more efficiently.

Furthermore, Mastercard’s award-winning startup engagement program, Start Path is providing fintech like Duplo and Mono with operational support, commercial engagement, and the opportunity for strategic investment.

Mastercard remains committed to supporting SMEs in Nigeria by leveraging its extensive network, cutting-edge technology, and strategic collaborations. By introducing contactless payment solutions like Tap on Phone, QR Pay by Link, and Payment Link, and collaborating with governments, financial institutions, and private sector partners, Mastercard is driving financial inclusion and digital transformation, and supporting small businesses as they navigate evolving commercial landscapes.