Mastercard has published the results of a study on the ecosystem of micro, small, and medium-sized enterprises (MSMEs) in Panama. The study, conducted by Mastercard Advisors, reveals that MSMEs constitute 97% of the country's total companies and contribute 17% to the Gross Domestic Product (GDP). Despite a favorable economic environment, significant challenges hinder their growth, including informality, low banking penetration, and a strong preference for cash. The analysis concludes that digitalization, access to capital, and technological adoption are crucial for enhancing the sector's impact on the national economy. Although Panama has a high level of digitalization (73.9% of the population has internet access), cash remains the dominant payment method. While 89% of Panamanian companies consider digital payments essential for scaling their business, 62% of MSMEs that do not accept them report weekly customer losses. Concerns about fraud are a primary barrier to the adoption of digital payments. Mastercard proposes three axes to boost MSME development: accessible digitalization, implementing practical solutions like Tap on Phone and Click to Pay to simplify sales and reduce cash dependency; intelligent financing, promoting alternative credit scoring models and forming strategic alliances to facilitate access to formal credit; and training and support, developing financial education programs to encourage the adoption of digital tools and more efficient business management. Soledad Rovira, Country Manager for Panama and Belize, commented: "The challenge is not to create more businesses, but to give them the digital push that allows them to grow. The potential of MSMEs is immense, and they are the true engine of growth."
