These findings illustrate that digital payment adoption does not automatically translate into comprehensive business digitisation.

Digital payments fail to solve SMEs’ productivity gap -report

Kenyan small businesses have embraced digital payments, but many are yet to translate the convenience of electronic transactions into more efficient business operations.

A new survey by global payments firm Visa shows that fragmented systems and time-consuming administrative tasks continue to undermine productivity.

According to Visa, while digital transactions have become commonplace among small and medium-sized enterprises (SMEs), only 19 per cent of those surveyed use an integrated platform connecting payments with broader business management.

It points to the next challenge in Kenya’s digital transformation: moving beyond the ability to send and receive money towards systems that help businesses manage cash flow, payroll, invoices and financial reporting more efficiently.

The survey, conducted through face-to-face interviews with business owners and financial decision-makers between March and April 2026, covered 256 Kenyan SMEs as part of research across 11 markets.

The administrative burden remains significant.

About 30 per cent of surveyed businesses reported difficulties tracking outstanding invoices, while 27 per cent struggled to organise payroll records and 26 per cent faced challenges preparing financial reports.

Poor invoice tracking can delay collections and leave enterprises short of working capital, while disorganised payroll records and financial reporting make it harder to monitor costs, assess profitability and plan expansion.

For smaller firms operating with limited staff and tight margins, time spent reconciling transactions across separate applications, spreadsheets and manual records can divert resources from sales, customer service and business development.

The gap is particularly important in an economy where mobile money has become a central part of everyday commerce.

The Kenya National Bureau of Statistics reported in its 2025 Economic Survey that mobile money usage among Kenyans rose to 82.3 per cent in 2024, from 79.4 per cent in 2019.

Similarly, the 2023 FinAccess Micro and Small Enterprise Tracker Survey by Financial Sector Deepening Kenya found that the proportion of businesses accepting digital payments increased from 74 per cent in October 2022 to 86 per cent in June 2023.

However, cash remained widespread, with 99 per cent of businesses conducting at least part of their transactions in cash.

Receiving money electronically is only one step; businesses must also be able to reconcile transactions, track debts, manage expenses and use reliable financial records to make decisions.

The opportunity for integrated platforms is therefore significant. Visa’s survey found that 81 per cent of respondents considered an all-in-one payment and business management solution appealing, compared with just 19 per cent currently using one.

Among businesses already using integrated tools, 85 per cent reported satisfaction, while 81 per cent said the solutions had improved efficiency, including reducing the time and effort needed to manage operations.

One in five respondents said they were unaware such tools existed, while 14 per cent believed their businesses were too small to need them.

Another 12 per cent did not see sufficient benefits.

This suggests that expanding adoption will require more than developing new technology.

Providers must demonstrate tangible returns, offer affordable products suited to smaller enterprises and ensure that systems are easy to use.

According to the report, training will also be important for owners who lack the time or expertise to implement unfamiliar software.

Businesses with organised transaction histories, invoices and financial statements can potentially provide lenders with a clearer picture of their revenues, operating costs and repayment capacity.

The Kenya Bankers Association reported in August 2026 that banks disbursed Sh326.5 billion in credit to micro, small and medium-sized enterprises in 2025, while outstanding MSME credit stood at Sh596.8 billion at the end of December.

The association identified inadequate collateral, weak credit scores, and repayment challenges among the barriers to financing.

Integrated platforms could help address some information gaps by enabling lenders to assess business cash flows more systematically.

However, better records alone will not guarantee credit approval, which will still depend on affordability, risk and lenders’ requirements.

Visa’s East Africa head, Anne Kinuthia-Otieno, said integrated platforms could give financial institutions a more complete, data-informed understanding of SME needs and support more tailored financing solutions.

The government’s National Financial Inclusion Strategy for 2025–2028 also emphasises improving access to quality, affordable financial services that meet users’ needs.