Across Africa and the world, small businesses are the backbone of economic growth. From neighborhood retailers and family farms to emerging tech startups, entrepreneurs are turning ideas into livelihoods and strengthening local economies. Though classified as small and medium-sized enterprises (SMEs), their impact on employment, innovation, and economic resilience is anything but small.
Globally, SMEs account for roughly 90% of all businesses, employ about 70% of the workforce, and contribute nearly 50% of global GDP. These businesses power local communities, create opportunities for young people, and help economies adapt during times of uncertainty.
In emerging markets, including much of Africa, their role is especially transformative. According to the World Bank, Sub-Saharan Africa will need to generate about 25 million new jobs every year until 2050 to keep pace with its rapidly growing working-age population. Small businesses are expected to deliver a large share of these jobs, offering pathways for entrepreneurship and economic mobility.
Yet the journey for many entrepreneurs remains challenging. Around 20% of SMEs fail within their first year, and only about half survive beyond five years. Economic disruptions such as the COVID-19 pandemic, rising inflation, and supply chain instability have added new pressures. One of the biggest hurdles, however, is access to the digital economy, which increasingly determines how businesses compete and grow.
Building skills for a digital economy
Financial education and business training are critical foundations for entrepreneurial success. A study by S&P Global found that only one in three adults worldwide can answer basic financial literacy questions. Without strong financial knowledge, entrepreneurs may struggle to manage credit, scale operations, or invest in technology.
Training programs that focus on budgeting, saving, responsible borrowing, and business management help entrepreneurs make informed decisions. Increasingly, organizations and financial institutions are offering digital learning platforms and training initiatives to strengthen these skills.
Beyond financial literacy, entrepreneurs also benefit from learning how to use digital tools such as e-commerce platforms, social media marketing, search engine optimization, and digital payment systems. These technologies allow small businesses to reach customers beyond their local markets and compete in a connected global economy.
Expanding digital payment acceptance
Digital payments are becoming an essential gateway into the modern economy. For many small businesses, accepting digital payments not only improves convenience for customers but also creates opportunities to build transaction histories that can unlock financing.
However, adoption remains uneven. Many SMEs still operate primarily in cash-based environments and may lack the infrastructure or knowledge needed to implement digital systems. Expanding access to affordable and easy-to-use payment technologies can help bridge this gap.
When small businesses adopt digital payments, they often gain access to broader networks of customers, suppliers, and financial services—fueling further growth.
Closing the SME financing gap
Access to capital remains one of the biggest barriers to SME expansion. The World Bank estimates a $5.7 trillion financing gap for micro, small, and medium-sized enterprises across emerging and developing economies.
Without sufficient funding, entrepreneurs struggle to invest in technology, hire workers, or expand operations. Closing this financing gap could unlock enormous economic potential, particularly across Africa where entrepreneurship is already vibrant and widespread.
Across the continent, new partnerships between investors, financial institutions, and technology companies are helping connect entrepreneurs with capital. Startup accelerators, fintech platforms, and venture funds are increasingly focused on supporting African entrepreneurs with funding, mentorship, and business development support.
These initiatives are helping thousands of startups scale their ideas—from digital commerce platforms to logistics services and financial technology solutions that serve small retailers and informal businesses.
A collaborative path forward
The evidence is clear: unlocking the potential of SMEs is essential for sustainable economic growth. Entrepreneurs bring creativity, resilience, and bold ambition—but they also face structural barriers that cannot be solved alone.
Public-private collaboration will be critical. Governments, financial institutions, technology companies, and development partners must work together to:
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Expand access to affordable financing for small businesses
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Strengthen financial and digital literacy programs
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Promote the adoption of digital payments and e-commerce tools
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Build policies that support innovation and entrepreneurship
Digital platforms are expected to drive a large share of global economic activity in the coming decade. Ensuring that small businesses can fully participate in this digital transformation will determine how inclusive and resilient that growth becomes.
Across Africa, entrepreneurs are already shaping the future. With the right support systems in place, SMEs can continue to create jobs, strengthen communities, and drive a more dynamic and connected economy.
