Traxia promises a decentralized global trade finance ecosystem. By using the blockchain, they will be able to offer transparent, fast, and not so costly transactions for small businesses. The way Traxia works is by putting together a hardware component — the blockchain itself and the software component such as the tokens — which are the result of smart contracts.
First, there’s the $43 trillion in accounts receivable at any given day, from which banks finance only 7% of these short-term assets. Second, banks keep arguing about liquidity problems in order to not finance SMEs, which is why small and medium-sized businesses get stuck while negotiating terms with their local banks. And third, your typical trade finance operations is time-consuming, bureaucratic, and simply too expensive for new SMEs. Banks use redundant paper trails and slow non-transparent and centralized credit decisions, which is never a solution.
Even if they do thrive and make a good figure in their own markets and grow locally, the problem with SME loans remain. Banks simply don’t want to get involved with a business unless that business is large or is expecting to grow in the next fiscal year. If that’s not the case, SME loans are basically nonexistent, which means that small business owners have two choices.