Mergers in the SME World: The Quiet Power of Teaming Up

Running an SME in Africa is like weaving through a bustling market—full of energy, but tough to stand out. Rising costs, tight competition, and cash flow struggles push many owners to trim expenses, rethink their business, or even close. But there’s a smarter move: teaming up with another small business. Mergers, joint ventures, or shared resources aren’t just for the big shots—they’re the secret ingredient that can help African SMEs grow stronger and keep going.

The Unmatched Advantages of Collaboration

Smart SME owners don’t just hustle harder—they build partnerships that boost their game. Picture a small Kenyan farm with great crops but no way to reach big buyers. Pair it with a local delivery business, and you have a team saving money and winning new markets.

Here’s what teaming up delivers:

Partnerships are a lifeline in Africa, where SMEs drive 80% of the economy (International Finance Corporation). However, only 23 per cent of SMEs get bank loans (World Bank, 2023). Teaming up can ease money woes and boost bargaining power.

Ditch the Fear of Losing Control. Many SMEs shy away from partnerships, worried about losing their independence. A 2024 Pan-African Chamber of Commerce survey found 60% of owners fear giving up control. Trust gaps or clashing work styles also hold people back. However, a Kenyan SME owner in Kisumu said, “I thought partnering would water down my business, but sharing a delivery van with a nearby farm cut my costs by 20% and got us bigger contracts.” Start small, sign clear agreements, and talk openly about goals. According to the survey, collaborators often see big wins—25% higher sales in two years.

Ways to Team Up

You don’t need a complete merger to succeed. Instead, you can try ideas such as shared services or splitting costs for staff or tech.

See how some Real African SMEs are making it work:

• Kenyan Agribusiness Merger (2023). Two small farms in Western Kenya merged their operations, pooling land and labour to secure a $500,000 export deal with a Middle Eastern buyer, per IFC reports.
• Moniepoint and Kopo Kopo (2023). Nigerian fintech Moniepoint bought Kenyan SME Kopo Kopo, merging payment platforms to serve more small businesses across Kenya.
• Peach Payments and Operativa (2023): South Africa’s Peach Payments acquired SME Operativa, a software firm, to boost its payment tech after a $31 million funding round.

Ready to grow?

Find a business with skills you lack—maybe a strong network or better tech. Check their finances with an accountant, try a small project first, and tap resources like the Enterprise Development Programme or local business hubs.

Ask: Do your values match? Can you fill each other’s gaps? A clear agreement keeps things smooth.

Go far together

Collaboration isn’t just a plan—it’s how African SMEs turn challenges into wins. Going solo can hold you back in today’s world of high costs and fast-changing markets. As the saying goes, “If you want to go fast, go alone. If you want to go far, go together.” Your next big win might be a conversation away.

Start connecting today. Reach out through an Africa Business Network or your local chamber of commerce. One chat could help your SME grow stronger.

Article by Michael Nyairo