The Common Market for Eastern and Southern Africa (COMESA) Business Council (CBC) is working to develop and deploy an integrated, low-cost, interoperable and fraud-resistant digital payments platform. The objective is to serve the Micro, Small and Medium Enterprises (MSMEs) engaging in cross-border trade (CBT) and the customers they transact with at the bottom of the financial pyramid. The business case and policy framework (Phase I) for this platform have been developed, while the business model (Phase II) is currently under development.

The deployment of this digital payments platform is expected to result in a significant increase in the adoption of digital cross-border (CB) payment solutions amongst MSMEs. Thereby increasing trade within the region and supporting the development of digitally inclusive economies within its member states. However, for this benefit to be realized, factors that lower the adoption rate of CB digital payments by MSMEs must be understood and addressed. This report captures the findings of a market research conducted to assess the key challenges faced by MSMEs to develop an understanding of their training needs for accelerating the use of digital payments for cross-border transactions.

The team used a mixed methods approach for this assignment. It employed both a bottom-up and top-down analysis. The bottom-up approach involved conducting primary research in the form of a survey of 313 MSMEs owners involved in CBT in the five countries of interest (i.e., Kenya, Malawi, Rwanda, Uganda and Zambia) and conducting 11 key informant interviews (KIIs) with financial service providers (FSPs), development organizations, trade and business associations and a regional secretariat. The top-down approach involved reviewing available secondary research