‘Government Support, Effective Policies, Key to SMEs’Growth’

A new research by Mastercard has highlighted the important role of government support in helping small and medium enterprises (SMEs) across the Middle East and Africa (MEA) to recover, position for growth, and contribute to economic prosperity.

In the inaugural Mastercard MEA SME Confidence Index, government support and implementation of effective policies was highlighted as ‘important’ by 88 per cent of the region’s SMEs, 50 per cent of which rated this point as a ‘must-have’ essential.

This sentiment was especially pronounced in the Middle East and North Africa (MENA) (92%) and Sub-Saharan Africa (90%) regions. In addition to looking for effective regulatory support from governments, 92 per cent SMEs in MEA stated that they are also looking for support in up-skilling of their teams, and 88 per cent highlighted the importance of improved telco infrastructure – pointing to opportunities to effect positive change in wide-ranging areas from education and skills development to systems and infrastructural progress.

“Public-private partnerships are crucial for effective development and implementation of initiatives that advance financial inclusion and inclusive growth. To achieve this, governments and the private sector must play a joint role in enabling a safe and secure operating environment,” the report added.

It noted that Mastercard works closely with governments and the wider business community to advance SME inclusion into the digital economy through tailor-made digitisation strategies, cutting-edge technologies, insights, and policy advice.

Furthermore, the report showed that across MEA, 51 per cent of SMEs stated that government-led initiatives could have a positive impact in supporting their businesses. These, it revealed, included the UAE, where Dubai Government launched a third stimulus package to support small and medium enterprises maintain business continuity by reducing operational costs, while the Abu Dhabi Executive Council allocated AED 3 billion to the SME Credit Guarantee Scheme.

“Furthermore, SMEs in the region recognize the great potential of public-private partnerships (PPP), and 63 per cent think private sector initiatives and partnerships will benefit businesses and the markets in which they operate.

“One in three SMEs (32%) think that collaborating with governments and businesses outside their markets could impact their growth. In Southern Africa this was especially pronounced, with over half (56%) agreeing.

The need for the public and private sectors to work together to create a better environment for small businesses has been outlined in a public policy paper titled: ‘Reimagining Support for Small Businesses,’ released by the Mastercard Policy Center for the Digital Economy in partnership with global consulting firm Kearney. The paper outlined a number of strategic recommendations which highlight how effective policy and innovation can address many of the challenges faced by business-to business SMEs.

“This is why it’s so important that we prioritize public-private partnerships for SME growth, and why we’re putting our technology, expertise and global network to work, helping to develop the infrastructure to connect more people – and more small businesses,” Senior Vice President, Core Products Middle East and Africa, Mastercard, Valerio Murta said.