Mastercard Economics Institute: Small Business Creation in South Africa Grew 13% From 2019 to 2020

Mastercard Economics Institute: Small Business Creation in South Africa Grew 13% From 2019 to 2020
Mastercard Economics Institute: Small Business Creation in South Africa Grew 13% From 2019 to 2020. Image source: Pixabay
  • Roughly 9% of the small retailers in South Africa remained closed after six months vs 3% of the large retailers
  • Following shutdowns worldwide, the number of businesses going online each month tripled from pre-pandemic levels, peaking in July 2020

Johannesburg, South Africa; 12 November 2021: To shed light on the impact of the global health crisis and the ongoing recovery thereof that has had a significant impact on small businesses globally, Mastercard has released Recovery Insights: Small Business Reset. Findings show that South Africa has the 12th fastest growing rate of entrepreneurship globally, with the pace of small business creation growing by 13% from 2019 to 2020.

Looking at 19 markets around the world, the report also revealed that sales at small- and medium-sized enterprises (SMEs) lagged larger companies by up to 20 percentage points at the peak of the crisis. However, spending has recovered in 2021. Total sales at SMEs rose 4.5% through August 2021 year-to-date compared to the same period in 2020, while e-commerce sales are up 31.4%.

Drawing on the Mastercard Economics Institute’s new Small Business Performance Index* of aggregated and anonymized sales activity within the Mastercard network, Recovery Insights: Small Business Reset identifies several key trends:


  • Closures: Globally, small businesses that closed early in the pandemic were about three times as likely as larger businesses to remain closed long term. One-third of small businesses that closed in April 2020 remained closed after six months, and about one-fifth were still closed after 12 months. In South Africa, roughly 9% of the small retailers remained closed after six months vs 3% of the large retailers.
  • Location: Globally, spending at SME retailers in central business districts is down 33% vs. 2019, while sales at residential neighborhood small retailers grew 8%. As tourists and workers stay closer to home, small businesses in commercial districts around the globe are seeing sales suffer.
  • E-Commerce: Following shutdowns, the number of businesses globally going online each month tripled from pre-pandemic levels, peaking in July 2020. Online retail in South Africa more than doubled in just two years, growing 66% in 2020 to reach an estimated R30.2 billion. According to the Mastercard SME Confidence Index, 64% of South African SMEs said that the rapid rise of e-commerce will have a positive impact on future business.
  • Entrepreneurship: One-third more small retailers launched in 2020 than in 2019, nearly 8x the number of larger firms created. This trend of considerable new SMB formation in 2020 is reflected around the world: U.K. (+101%), U.S. (+86%), Australia (+73%), Germany (+62%), Brazil (+35%), and South Africa (+13%).
  • Sectors – Restaurants, Lodging and Grocers: In Middle East and Africa (MEA), small lodging businesses have consistently outperformed larger businesses in 2021, seen specifically in South Africa. Where people are traveling, the trend to stay local has benefited small lodging companies (and hurt big cities’ big hotels). Small grocers in South Africa too have seen consistently higher performance than large grocers. Globally, restaurants were a different story, with SME eateries underperforming large ones by roughly 17 percentage points in 2021 YTD.

“Supporting neighborhood businesses has been a rallying point throughout the pandemic. However, the challenges faced have been very real, due to their dependency on local markets, local supply chains and tighter cash flows,” said Bricklin Dwyer, Mastercard chief economist and head of the Mastercard Economics Institute. “But, we see brighter opportunities ahead. The shift to digital opened the door to the pandemic’s silver lining: a resurgence of entrepreneurship and innovation.”

Mastercard continues to support small businesses and has pledged to bring 50 million small businesses and 25 million women entrepreneurs into the digital economy by 2025. In South Africa, Mastercard has collaborated with Google and Standard Bank to help SMEs move their businesses online, accept digital payments and attract more customers. Through the collaboration, SMEs can get free access to Standard Bank’s SimplyBlu, an all-in-one e-commerce solution powered by Mastercard Payment Gateway Services, plus free Google Ads to the value of R500 until 31 December 2021.

Mastercard’s Digital Doors curriculum helps businesses get online and stay protected, ensuring they have the right tools to maximize their digital presence and integrate e-commerce seamlessly, including the free Small Business Digital Readiness Diagnostic. Most recently, Mastercard committed $25 million to help more than five million micro and SMEs digitize through the Strive initiative. Through its partnership with Junior Achievement South Africa, Mastercard has helped over 3,000 women gain entrepreneurial skills to start and grow their own businesses.

Mastercard also works closely with governments, businesses and other organizations around the world to create environments, programs and policies so small businesses can flourish. Mastercard provides high-frequency, local spending insights to dozens of city, state and federal governments as part of our City Possible and Recovery Insights programs, as well as content such as the recent policy paper addressing ways governments can support SME recovery.

You can view the full Recovery Insights: Small Business Reset here. This is the fifth report in the Recovery Insights series; other reports can be found here.


The Mastercard Economics Institute developed the Mastercard Small Business Performance Index as a more universal classification system for SMEs. The Index leverages a comprehensive AI-driven algorithm to identify unique indicators, such as number of locations, sales volume, number of transactions, within aggregated and anonymized sales activity in the Mastercard network.


This presentation and content are intended solely as a research tool for informational purposes and not as investment advice or recommendations for any particular action or investment and should not be relied upon, in whole or in part, as the basis for decision-making or investment purposes. This presentation and content are not guaranteed as to accuracy and are provided on an “as is” basis to authorized users, who review and use this information at their own risk. This presentation and content, including estimated economic forecasts, simulations or scenarios from the Mastercard Economics Institute, do not in any way reflect expectations for (or actual) Mastercard operational or financial performance.


About Mastercard Economics Institute

Mastercard Economics Institute launched in 2020 to analyze macroeconomic trends through the lens of the consumer. A team of economists, analysts and data scientists draws on Mastercard insights – including Mastercard SpendingPulse™ – and third-party data to deliver regular reporting on economic issues for key customers, partners and policymakers.


About Mastercard (NYSE:MA)
Mastercard is a global technology company in the payments industry. Our mission is to connect and power an inclusive, digital economy that benefits everyone, everywhere by making transactions safe, simple, smart and accessible. Using secure data and networks, partnerships and passion, our innovations and solutions help individuals, financial institutions, governments and businesses realize their greatest potential. Our decency quotient, or DQ, drives our culture and everything we do inside and outside of our company. With connections across more than 210 countries and territories, we are building a sustainable world that unlocks priceless possibilities for all.