By Emma Okonji | From This Day Live

A recent report that focused on micro, small and medium-sized enterprises (MSMEs) across Africa, has revealed that more than 95 per cent of MSMEs, operate with personal cash, which is untraceable, costly to handle and unsafe.

Operating with personal limited cash, means that the entrepreneurs do not meet most of the lending criteria, and as a result, are declined credit facilities at banks. The report, which blamed the situation on lack of proper business model, said entrepreneurs’ business plans lack a crucial component, a payment strategy that leverages existing technology.

“Interestingly, it is estimated that only 22 per cent of enterprises in sub-Saharan Africa have a loan or a line of credit.  This lack of access to a formal payment infrastructure limits the businesses growth because of the lack of insight into the owner’s track record,” the report revealed.

Rather than limit the scope and scale of one’s business to customers who are able to transact with a certain amount of cash at a time, electronic payments taps into the power of the Internet to extend the geographical scope of clients who can transact digitally, from any part of the Africa and the world, the report added.

Two of the solutions that are currently being rolled out across Africa to help MSMEs are the MasterCard Payment Gateway Service (MPGS) and mobile point-of-sale (MPOS). The secure and robust Internet payment solution and affordable MPOS devices help entrepreneurs accept payments on their website from cardholders around the world and physically in remote locations. Not to mention the fact that these merchants can capitalise on local business opportunities that previously weren’t fully explored.

Read more at This Day Live