Kenya’s small and medium enterprises (SMEs) are entering the year with strong optimism, with 66 per cent expressing confidence in their business outlook and 70 per cent expecting revenue growth over the next 12 months, according to a Mastercard study.
The findings, drawn from the Mastercard SME Confidence Index—a multi-market survey covering Eastern Europe, the Middle East and Africa—highlight how Kenyan businesses are leveraging their early adoption of mobile money to remain resilient and competitive amid ongoing economic shifts.
Kenya continues to stand out as a regional leader in mobile payments, with nearly all SMEs (95 per cent) now accepting mobile money. These transactions account for 41 per cent of total payment volume, surpassing both card payments (29 per cent) and online transactions (39 per cent), underscoring the depth of digital integration within the SME sector.
“Kenyan SMEs are some of the most digitally fluent on the continent, and their optimism reflects a wider story unfolding across Africa,” said Gabriel Swanepoel, Division President, Africa at Mastercard. “Businesses here are showing what is possible when entrepreneurs embrace digital tools and build on them with ambition.”
He added that Mastercard’s focus is to support SMEs with payment solutions, insights, and access to finance that can translate digital momentum into sustainable growth.
The optimism is also reflected in financing behaviour, with 44 per cent of SMEs seeking external funding over the past year. Most of those businesses are pursuing credit to expand operations rather than simply sustain them, signalling a strong growth orientation within the sector.
“SMEs are the engine of Kenya’s economy, and their confidence in the year ahead speaks volumes about their resilience and ambition,” said Shehryar Ali, Senior Vice President and Country Manager, East Africa at Mastercard. “They are now ready for the next step—turning everyday transactions into data, insights and access to capital that support scale.”
Inflation pressures persist, but outlook remains positive
Despite strong optimism, inflation remains the most significant operational challenge, cited by 77 per cent of businesses. However, technological progress and digitalisation continue to act as a major counterbalance, with 62 per cent of SMEs identifying them as key growth drivers.
Overall, 70 per cent of respondents expect revenue growth, while 66 per cent remain confident about business conditions in the coming year.
From payments to data-driven growth
With widespread adoption of digital payments already established, SMEs are now shifting focus toward more advanced capabilities. Key priorities include seamless and user-friendly payment systems (80 per cent) and improved access to data, analytics, and business insights (70 per cent).
The shift signals a transition from simply accepting payments to leveraging customer data to improve decision-making, strengthen omnichannel strategies, and anticipate consumer needs.
Strong demand for growth capital
Access to finance remains central to SME expansion plans. Nearly half (44 per cent) of entrepreneurs sought external funding in the past year, with a majority prioritising credit for business expansion rather than maintenance.
However, many SMEs still rely on informal financial tools, pointing to opportunities for greater uptake of structured credit products such as business cards and tailored working capital solutions.
Expanding digital inclusion through partnerships
Mastercard continues to deepen partnerships in Kenya aimed at strengthening digital payment infrastructure and SME capability.
Key initiatives include a collaboration with Safaricom to enhance acceptance across the M-PESA ecosystem, supporting more than 636,000 merchants. The company is also expanding Tap to Pay solutions, enabling smartphone-based acceptance, alongside tokenisation-enabled wearables for secure transactions.
Additional collaborations with KCB Bank, I&M Bank, NMB Bank, and Diamond Trust Bank are helping scale digital payments and financial services across the country.
According to Mastercard, these efforts have contributed to a 45 per cent increase in its acceptance network across Africa, expanding access to digital commerce for SMEs.
As Kenyan SMEs build on strong digital foundations and rising confidence, the Mastercard SME Confidence Index points to a sector increasingly positioned for scale, innovation, and deeper participation in the digital economy.
