E-Financial
81 Percent of SMEs Optimistic About Future Growth in Nigeria – Mastercard Report
After facing unprecedented changes in the wake of the COVID-19 pandemic, Small and Medium Enterprise (SME) confidence in Nigeria is on the rise, according to the latest research by payments technology leader Mastercard.
The inaugural Mastercard Middle East and Africa (MEA) SME Confidence Index found 81% of SMEs in Nigeria are optimistic about the next 12 months, compared to the regional average of 74% in Sub-Saharan Africa.
Looking ahead, 78% of SMEs in Nigeria are projecting revenues that will either grow or hold steady. Over half (56%) are projecting an increase.
Access to credit, and acceptance of digital payments 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 Nigeria have identifiedaccepting digital payments (75%), easier access to credit (72%), and doing business internationally and digitizing business operations (72%)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 various stakeholders including the government and banking institutions to create opportunities for Nigeria’s 41 million MSMEs.
Collectively, they contribute about 50% to the national GDP, although this share could grow given that only 23% of females operate formal SME businesses in Nigeria.
Mastercard has pledged $250 million and committed to connect 50 million micro, small and medium size businesses 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.
Ebehijie Momoh, area business head, West Africa, Mastercard, “Small businesses have faced big challenges over the past year, but one of the most important things they can do for their own growth and in terms of future-proofing their business, is to prioritize digital payments acceptance.
“It is extremely encouraging to see that Nigerian businesses are recognizing this and understanding the role that safe, secure and simple digital payments can play as they tackle the year and decade ahead with renewed optimism.
“At Mastercard, we are committed to keep SMEs connected to the tools they need to create new connections and sustainably grow commerce.”
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, 54% of SMEs in Nigeria mentioned the challenge to maintain and grow their business was their top issue.
Looking at concerns over the next 12 months, 55%identified the rising cost of doing business, while 53% cited the need for easier access to capital and funding. Private sector partnerships (50%) and government-led initiatives (52%) were identified as having the biggest potential to positively impact SMEs and the wider Nigerian.
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 over three in four Nigerian consumers (84%) say that they would shop at small businesses, if they offered more payment options, and 81% noted being more excited to shop at retailers that can offer the latest payment methods, and an equal proportion (81%) said they would be more loyal to retailers who offered multiple payment options.
Central Bank of Nigeria (CBN) spent N315.18bn on currency issue expenses in 2024, marking a sharp increase of 306 per cent compared to N77.67bn recorded in 2023, the apex bank’s audited financial statement for the year has shown.
Currency issue expenses cover the printing, processing, distribution, and disposal of banknotes.
The latest figures reveal that the CBN’s cost of managing physical cash spiralled dramatically during the year under review, as Nigeria grappled with lingering cash shortages and disruptions in the money supply chain.
The surge in expenditure came as the country continued to deal with the effects of the naira redesign policy introduced in late 2022.
Despite efforts to stabilise cash circulation throughout 2023, Nigerians still faced queues at ATMs and difficulties in accessing cash in early and late 2024.
Faced with mounting public outcry, the CBN deployed several emergency measures to address the crisis.
Deposit Money Banks were directed to ensure consistent ATM loading and rural cash distribution, while the Bank also launched public hotlines for citizens to report cash scarcity incidents.
Also, the CBN ramped up enforcement efforts, including deploying monitoring teams, issuing sanctions against non-compliant banks, and mandating improved cash distribution.
PalmPay, a full-service digital bank, has reaffirmed its dedication to advancing the future of payments in Nigeria by promoting the widespread adoption of contactless-enabled payment terminals.
This was made known during the recently concluded BusinessDay Future of Payment Conference, themed “Fintech Evolution: Gateway to Payments.” In his welcome address, BusinessDay Publisher, Frank Aigbogun, emphasized that the next phase of fintech innovation must be driven not only by speed, safety, and simplicity but also by trust, inclusion, and accessibility to ensure broad-based impact across all segments of society.
Talking about PalmPay’s impact in the panel session titled “The Next Wave of Digital Payments: Trends and Innovation,” Ifeanyi Uzoka, Senior Business Development Manager at PalmPay, discussed the evolving landscape of digital payments in Nigeria.
He noted that while regulatory frameworks have supported the introduction of contactless payments, the high level of cash dependency remains a key barrier to widespread adoption.
“At PalmPay, financial inclusion is central to everything we do,” Uzoka stated. “To support this mission, we’ve launched contactless-enabled debit and premium cards, ensuring our users have access to convenient and secure payment experiences. We also understand that trust is critical, which is why all contactless transactions on PalmPay’s platform include an additional layer of authentication for enhanced security.”
PalmPay continues to lead innovation in Nigeria’s digital finance ecosystem by delivering secure, user-friendly, and future-ready solutions. The company’s recently launched debit and premium cards in partnership with Verve are now serving its growing base of over 35 million users nationwide.
This move into contactless payments underscores PalmPay’s alignment with global payment trends and its ongoing commitment to building a more inclusive and digitally empowered economy.
First Asset Management Limited, a leading investment management firm in Nigeria and a subsidiary of First HoldCo Plc., has announced a significant milestone, the company has surpassed ₦1 trillion in Assets Under Management (AUM).
This achievement reflects the firm’s steadfast commitment to delivering exceptional client service and strong investment performance. It also underscores the trust and loyalty shown by its clients, partners, and stakeholders, which have been instrumental in driving the company’s sustained growth.
Speaking of the milestone, Ike Onyia, Managing Director of First Asset Management Limited, credited the accomplishment to the enduring support of the firm’s clients and stakeholders.
“This milestone is a clear indication of the confidence placed in us by our clients and partners. It highlights the firm’s ability to deliver successful investment outcomes and reinforces its dedication to fulfilling its mandate,” Onyia said.
He went on to express deep appreciation to the firm’s clientele: “The continued partnership of our clients is not taken for granted. Their commitment has been pivotal, and the performance of their investments inspires the team’s dedication to providing best-in-class service. As the firm continues to grow, it remains focused on deploying innovative and forward-looking investment strategies tailored to each client’s financial goals.”
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