The Impact of MSMEs in an Economy and the relevance of Tokoin to MSMEs
The relevance of MSMEs in economic growth
China, formerly one of the poorest countries globally, in just over thirty years has succeeded in becoming the second-largest economy globally, with economic stability rivaling and even superseding developed countries of the western world. This growth although enormous owes its success largely to the impact of Micro, Small, and Medium Enterprises(MSMEs).
MSMEs play a vital role in the development of any economy and the impact of China’s remarkable MSMEs can be felt globally, with numerous countries importing billions of dollars worth of good annually from China.
How MSMEs can help with economic development in Emerging markets
China’s economic growth is proof that MSMEs can effectively boost the economy of a nation if adequate resources are available to support and finance its growth. This has resulted in the governments of developing countries allocating funds for MSME financing through grants and loans which in many cases are often insufficient.
Since it is common knowledge that the growth of MSMEs boosts the economy of developing countries, why then are MSMEs not thriving in these countries?
Some challenges experienced by MSMEs
- The disconnect between Financial institutions and MSMEs
MSMEs although the backbone of a nation’s economy often lack sufficient access to funds to continue operating till they break-even with a study of MSMEs the UK reporting that over fifty percent of MSMEs do not make it beyond their first five years.
Some of the major causes of this being the lack of proper legal documentation, unprofessional book-keeping skills, insufficient credit history, and the lack of assets for use as collateral. These limitations financially exclude numerous businesses from accessing financial services and aids even though they may be readily available.
- No means of accessing and increasing business reputation
It is difficult being an MSME in an emerging market, however, as these businesses grow and improve in service delivery, userbase and cashflow, there exists no effective means of acquiring and increasing reputation within the business world. This makes it difficult to effectively evaluate a brand based on previous transaction history as there are insufficient data to utilize in the evaluation such of businesses.
This makes it difficult for MSMEs to easily break into the larger market as large businesses may often choose not to conduct businesses with them as a result of lack of trust. This lack of could also stem from suppliers who do not trust these businesses enough to supply them with goods on credit and customers would rather patronize brand they trust over new ones.
- Insufficient access to data
MSMEs require adequate data on effective marketing strategies, leveraging economies of scale, and other relevant data on survey and information on their area of business are not readily available as most large companies tend to keep such data to themselves.
Also, the data generated by these MSMEs are often not effectively collected and processed for analytical purposes with the intention of increasing profitability and growth.
Why MSMEs should embrace Tokoin
It is without a doubt that we live in a digital era where everything is becoming digital — from assets and investments to education and information. In this age of information, it is imperative for MSMEs that want to thrive as not only local businesses but as global brands to embrace the digital identity of Tokoin and leverage the benefits of blockchain technology.
Tokoin is a decentralized platform which utilizes blockchain technology in creating digital identities, business reputation, and other relevant solutions for MSMEs — effectively solving the limitations associated with common MSMEs practices while facilitating sustained growth.
Tokoin easily transforms MSMEs from local businesses and makes them available to the global market, making them direct competitors to globally recognized brands, creating a level playing field for businesses.
The relevance of Tokoin to MSMEs
Tokoin has been developed for the MSME market, enabling them to build digital identities, facilitate digital recognition, increase MSME brand trust, facilitate the growth of MSMEs, and provide access to financial services, effectively bridging the divide between businesses and the finance sector.
Tokoin facilitates seamless business to business(B2B) and business to client (B2C) transactions through the use of its Marketplace, effectively creating a revolutionary platform for building MSME reputation within the E-commerce sector.
- Digital Identity creation for Businesses—Building brand profile and reputation using blockchain technology
In this digital era, the relevance of a digital identity for businesses cannot be over-emphasized. This digital identity transcends merely having a website and into the aspects of business reputation and credibility, business transactions and processes. Essentially, these digital identities are business profiles which contain relevant information on businesses which are stored on the immutable and distributed ledger of the blockchain, effectively creating a trusted business profile based on credible transaction data.
Obtaining a digital profile on Tokoin makes it easy for businesses to utilize the advantages of blockchain technology in utilizing their data for reputation building. These recorded data can easily be shared and utilized for various beneficial purposes like credit-scoring and financial evaluation.
- Efficient data collection, management, and processing
One of the major challenges for MSMEs during loan applications is the lack of sufficient document and information on customer/user base, cash flow records, and other relevant documents. The lack of relevant financial data often makes it difficult for MSMEs to receive financial aid even when readily available.
Tokoin realizing that this problem could easily be circumvented with blockchain technology utilizes the decentralized distributed ledger of the blockchain which not only ensures transparency but provides credible data which cannot be falsified. This saves time and other valuable resources that would be expended using traditional ledger systems for data recording and storage.
- Access to Partner services and a larger market
Tokoin being a global brand automatically creates a platform to launch businesses from their locality into the global market, making their data and services accessible to a larger population, potentially increasing their reach, customer-base and the likelihood of partnerships.
- Digital Identity + Efficient and trustless book-keeping = Higher credibility and access to more financial services
The use of Tokoin creates an easily accessible digital profile that financial institutions and potential customers and partners can easily access and utilize in decision making, reducing the time and resources required for the relevant evaluation. The credit scoring system also eliminates trust issues that may arise while evaluating an MSME.
Tokoin Products and Services
Tokoin has numerous features which include a Lending Marketplace which will serve the purpose of connecting MSMEs in need of financing and financial institutions that offer lending services. This will make it easy for MSMEs to obtain financing within the Tokoin ecosystem.
The Tokoin ecosystem also supports Invoice-based financing where MSMEs can use invoices of purchases made by customers as collateral to borrow against. Businesses on the platform can also engage in group buying in order to leverage the benefits of scale. These MSMEs can easily band together and make purchases to receive discounts on bulk purchases and reduce the average cost of purchase per enterprise.
MSMEs can also obtain loans from multiple investors/lenders through crowdlending. Tokoin also supports installment purchases and many other services that facilitate the development of a healthy MSME ecosystem.
Tokoin has its Point of Sale(PoS) terminals to enable the easy clearance and recording of retail purchases and sales. The Tokoin PoS keeps track of transactions by using the Digital Business ID. The Tokoin PoS is essentially for offline payments which require physical interactions. Transaction details are automatically recorded to the digital ledger associated with the Digital Business ID for which the PoS was issued.
Gone are the days of stressful book-keeping, let Tokoin assist you with that while you focus on building your business into the global brand it ought to be!
Tokoin in a bid to ensuring seamless access to its platform and services has developed a decentralized application employs blockchain technology for the storage of data captured from the Tokoin platform. This data can easily be monetized by the owner of the data.
Tokoin is incredibly flexible, supporting both online and offline digital identity creation and transaction validation using PoS, and QR codes effectively facilitating financial inclusion for MSMEs regardless of their size, structure or nature.
Why continue to fight against odds stacked up against you as a Micro, Small and Medium Enterprise owner when you can easily leverage the benefits of the Tokoin ecosystem to launch your brand into the global decentralized market, build your brand’s reputation, and access numerous services?