The majority of Ukrainian entrepreneurs (61%) continue to work despite the war, forced relocation, difficulties with logistics, and a decrease in sales volumes, and 91% of those who suspended their activities are ready to resume in the future. These are the results of the Mastercard SME Index study, which studied the state and key needs of small and medium-sized businesses in Ukraine, as well as the prospects of returning to the pre-war level.

Key results of the Mastercard SME Index study:

  • 61% of Ukrainian SMEs continue to work despite the war, adapting the business to the new reality;
  • 9 out of 10 entrepreneurs who stopped business as a result of the war are ready to resume work in the future;
  • 53% believe that it will take one to three years for business to return to pre-war levels;
  • 70% of entrepreneurs use digital sales channels;
  • For 39% of businesses currently operating, these channels bring in more than half of all orders;
  • 87% of businesses provide customers with the option of cashless payment, and every tenth accepts payment in cryptocurrency.

State and main needs of small and medium-sized businesses

The war significantly affected the income of small and medium-sized businesses. 79% of the respondents state a decrease in business volumes, and for half of the entrepreneurs, such a decrease reaches from 50% to 99%. At the same time, every fifth entrepreneur managed to maintain (19%) or even increase (2%) business volumes compared to the pre-war period.

Adapting to the new reality, every second entrepreneur (50%) was forced to transform their business activities. Most often, these changes related to the reorientation of business to the defense needs of the country (17%), the transition to another business area (16%) or the transfer of production facilities to other regions of Ukraine or abroad (13%).

Business recovery will take time and support. Depending on the long-term situation in Ukraine, 41% of respondents predict a return to pre-war indicators within a year, 30% believe that it will take one to two years, and 23% expect that they will be able to fully recover no earlier than in two to three years. Among the main needs of currently active businesses are new orders and sales markets (56%), funds for development (33%), and help with logistics (23%).

However, despite the decrease in the level of income and the difficulties faced by small and medium-sized businesses today, Ukrainian entrepreneurs will actively donate money to charity and support volunteer initiatives – 74% of respondents say this.

Digitalization and non-cash payments

Active digitization is characteristic of most representatives of small and medium-sized businesses in Ukraine. Thus, 70% of entrepreneurs indicate that they use digital sales channels, among which the most popular are social networks (40%) and their own website (33%). According to the assessment of 39% of surveyed working entrepreneurs, it is digital channels that bring more than half of all orders to their business.

“In recent years, we have seen how digital transformation helps Ukrainian entrepreneurs to develop, and today digitalization has gained special importance. Ukrainian small and medium-sized businesses see this as an important condition for their recovery and growth, and look positively to the future. Two-thirds of Ukrainian small and medium-sized businesses already use digital channels, so the potential and need for further digitalization are obvious. It plays an important role in helping Ukrainian entrepreneurs, and we, for our part, will continue to use our technologies, innovations and expertise to help Ukrainian businesses grow,” said Inga Andreyeva, General Director of Mastercard in Ukraine and Moldova.

The number of businesses that accept payment for goods or services in cashless form is increasing. Thus, with the beginning of the war, 8% of entrepreneurs began to accept non-cash payments for the first time. In general, according to the results of the research, today 87% of businesses that operate accept payment in cashless form – through a POS terminal, to a bank account or with the help of digital services. At the same time, a third of entrepreneurs claim that the vast majority of payments (90-100%) are made without cash.

Ukrainian entrepreneurs show interest in the latest payment technologies. Thus, according to the results of the study, one in ten accepts payments for goods and services in cryptocurrency, and 24% of businesses are considering such a possibility in the future.