After facing unprecedented changes in the wake of the COVID-19 pandemic, Small and Medium Enterprise (SME) confidence in Saudi Arabia is on the rise, according to the latest research by Mastercard.
The inaugural Mastercard Middle East and Africa (MEA) SME Confidence Index found that 83% of SMEs in Saudi Arabia are optimistic about the next 12 months. In fact, 83% are projecting revenues that will either grow or hold steady. Half (50%) are projecting an increase.
Access to data, 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 Saudi Arabia have identified better data and insights (47%), training and upskilling staff (46%) and access to training and development support (44%) as the top 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 country’s small business sector. Saudi Vision 2030 aims to raise the contribution of SMEs to 35% of gross domestic product (GDP).
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.
“Small and medium sized businesses are vital to the Saudi economy as it diversifies and grows. Through the most difficult days of the pandemic, SMEs continued to press ahead, and it is encouraging to see the renewed optimism and confidence in this sector today. Mastercard stands ready to continue supporting and growing with these key drivers of the economy. As Saudi Arabia continues to transform the way it does business, providing opportunities for millions of workers and their families, Mastercard is delivering simple, secure, and innovative payment solutions that are driving commerce today,” said J.K. Khalil, Country Manager for Saudi Arabia, Bahrain & Levant, 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, 48% of SMEs in Saudi Arabia mentioned the challenge to maintain and grow their business was their top issue. Looking at concerns over the next 12 months, almost half (49%) identified the rising cost of doing business, while 41% cited red tape and regulations. Private sector partnerships (62%) and government-led initiatives (55%) were identified as having the biggest potential to positively impact SMEs and the wider KSA market.
“Be it facing the challenges of maintaining and growing a venture of cutting through red tape, Saudi SMEs have adopted a transformative approach. At Mastercard, we will continue to support SMEs of all sizes and across all sectors; and our goal remains, as always, to expand the access to the digital economy for all businesses,” added Khalil.
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 77% of Saudi consumers are shopping more online than they did since the start of the pandemic and 94% of Saudi shoppers would consider making a purchase with an emerging payment technology over the next year.