MSMEs AND ALTERNATIVE FINANCING
MSMEs are the base of national economies, symbolizing a great percentage (95%) of documented corporations globally, also, representing more than 50 percent of employment and providing more than 35% GDP in many developing economies. They facilitate invention and influence a pivotal part in incorporating the disadvantaged into the financial mainstream.
Regardless of the prospects exhibited by MSMEs, many still battle to attain their maximum market capacity owing to insufficient financing with the existing credit gap for formal MSME businesses. Most banks are always hesitant to loan or give credit facilities to MSMEs, illustrating greater risks and restricted means of collateral. The consequence of this is that rising amounts of MSMEs are now resolved to non-bank financing means and monetary technology inventions (such as blockchain technology) so as to meet their demands of adequate funding.
The outright emergence of blockchain technology as well as the rising quest for an alternative finance market, is altering the conventional strategies of MSMEs financing and delivers the likelihood for expanded productivity and efficiency in the manner financial services are given. For example, a crypto based project "TOKOIN" has been a front runner in providing alternative means of financing for small business ventures (https://link.medium.com/ulFi9UFR9Z).
Tokoin platform provides MSMEs the alternative to creating a status profile that enables them build confidence from banks, suppliers, and other service providers.
In addition, with regards to the most prominent alternative financing cliques are peer-to-peer (p2P) lending, crowdfunding and initial coin offerings (ICOs), with the major stakeholders in countries like USA, UK and China that has the largest online alternative finance market.. Documented research have shown that online peer-to-peer lending and crowdfunding expanded considerably in the year 2017, exceptionally in countries with insignificant markets.
Furthermore, MSMEs are spinning towards non-bank financing means at a rapid rate than in the past. Assessing alternative financing means by MSMEs is evolving than usual. Some countries proceeded to do better to promote MSMEs access to bank and alternative means of finance by modifying constraints and initiating targeted strategies to aid online-based financial source.
Moreover, the lack of digital identity and credit information of MSMEs also deters banks from expanding financial aid. Unsurprisingly, the restrictive banking system especially in emerging economies has led to a much broader funding gap, deterring the growth of MSMEs. From my research, I discovered that Tokoin is already developing a digital identity profile for MSMEs which will to a large extent ease their accessible to credit facilities (Check out @TokoinGlobal’s Tweet: https://twitter.com/TokoinGlobal/status/1171507009692131330?s=09). It is good to know that Tokoin is spearheading the redefinition of the paradigm of alternative financing.
Also, talking about impact of crypto projects, In March 2018, Ripple donated $29 million worth of its token XRP and completely funded all the projects on DonorsChose.org; there have been s milar impacts in the health sector as well as other spheres of engagement.This is indeed a great challenge to other crypto projects.
"To do more for the world than the world does for you–that is success" This Henry Ford’s famous quote clearly captures Tokoin’s rigorous drive in promoting MSMEs, doing more for them and facilitating success and also XRP humanitarian engagement as well as the impacts other projects has had on the populace.
In conclusion, There is a great prospect for the blockchain community to stand as an alternative to financing and act as leverage for MSMEs; bit by bit, step by step, we will get there!!!