Tokoin’s Partnership
How Tokoin XSQ Partnership Facilitates MSME Sector’s Growth
Tokoin XSQ Partnership symbolizes the recognition of MSME sector’s importance and facilitates the industry’s growth. What to expect from these companies?
According to the data from the IFC/World Bank MSME Database 2011 report, 50–60% of micro, small, and medium enterprises (MSMEs) in emerging markets were unserved or under-served, as highlighted in McKinsey Report from 2012. Speaking differently, MSMEs, while being largely dependent on banks and other financial institutions for financial support, faced a lot of rejection from banks when applying for a loan.
As a possible solution, the same report, “Micro, small and medium-sized enterprises in emerging markets: how banks can grasp a $350 billion opportunity” talked about how banks are advised to adopt an open approach to the evaluation of MSMEs’ credit applications. The report noted the following:
“Poor data and poor business cases [by MSMEs] constrain lending growth most. Around three-quarters of the banks we interviewed listed poor business cases as a critical reason for credit declines, and more than two-thirds cited poor information availability as a critical constraint to lending.”
Seven years forward, and the situation for MSMEs has not changed drastically — MSMEs are still lagging behind large enterprises, being unable to obtain the necessary data and build the credit score to get the proper funding.
What is more, MSMEs, while being mostly rejected by financial institutions, still manage to serve as the backbone of most global economies and play a primary role in developing countries.
This alarming issue has been lingering in the global economy for decades and the solution for MSMEs might just lie in already not-so-nascent technology called Blockchain.
Tokoin Provides Fair Business Environment for MSMEs
Tokoin is an Indonesia-led project that understands the complications of MSMEs from the very root of the problem. In fact, the MSME industry appears as a major player in Indonesia’s economy, totaling to more than 50% of its GDP, which served as one of the factors leading to the creation of Tokoin.
In order to address the two key challenges of MSMEs, namely, the aggressive competition and lack of credibility, Tokoin has put forward an innovative solution. The Tokoin platform is a place that establishes the identity of MSMEs as an acceptable reputation in the business ecosystem. To do so, Tokoin employs the digital sector as a facility.
As an ultimate goal, Tokoin strives to provide MSMEs with a solution to the problems they are facing by building a digital identity for them, by leveraging the data by putting value into them, and by encouraging business partnerships.
As MSMEs obtain Digital Business IDs, they can record and keep track of their business operations in a digital ledger. At the same time, Tokoin enables them to distribute the credit scoring to other partners present in the Tokoin ecosystem. Such ecosystem exists to benefit the participants and is being fueled by data distribution.
The value associated with the shared data serves as an indicator of credit scoring that adds to the reputation of the business ID. As a result, the data are used to generate collaboration between participants.
Tokoin’s platform TOKO token acts as a means of interaction between the members of ecosystem. The token is utilized as a reward when a participant in the ecosystem sends transaction data and validates the data.
MSMEs use TOKO tokens to build their credit scoring that can be later leveraged to get access to various business services. In the same fashion, partners of Tokoin, such as financial institutions, use TOKO tokens to access MSMEs’ shared data.
Tokoin XSQ Partnership Comes Amid Global MSMEs’ Importance Acknowledgement
Amina J Mohammed, the United Nations Deputy Secretary General notes in the SME Competitiveness Outlook 2019 that “micro, small, and medium enterprises are key to creating the 600 million new jobs needed by 2030 to keep pace with the growth of the world’s working-age population”. On the same note, the UN also states that MSMEs can sometimes be the only source of employment in rural areas.
As global organizations began to realize the potential benefits of supporting the MSME sector, Tokoin inked a partnership to solidify its efforts in doing so.
In February 2019, Tokoin entered into the partnership with XSQ Blockchain Infrastructure and Investments. As per the agreement between these two businesses, XSQ serves as a lending partner for Tokoin, thus providing MSMEs with the so-needed funds for future growth.
Moreover, the Tokoin XSQ partnership will widen the reach of Tokoin’s project to XSQ’s audience and vice-versa. Following this, companies join forces to facilitate the use and application of Blockchain technology in the modern business sector.
As part of the partnership, Tokoin participated in a meetup organized by XSQ on 27th June 2019. The tech event took place at Beach Road, Shaw Tower (behind Suntech City), Singapore and was focused on the topic of decentralized finance.
Worthy of note, the General Assembly declared 27 June the Micro-, Small and Medium-sized Enterprises Day as a gesture of recognition of the sector’s importance. The day is dedicated to raising awareness of MSMEs contribution to sustainable development.
XSQ Is On a Mission to Aid Blockchain Adoption
XSQ is a Singapore-based business that works in three directions: cryptocurrency mining and infrastructure, crypto venture capital funding, and advocacy.
The company provides hardware and infrastructure to facilitate cryptocurrency mining. XSQ operates its data centers in Singapore and is always on the lookout for setting up their facilities globally. XSQ is an ambassador of Blockchain and cryptocurrency adoption. They break down fundamental theories and practical elements of using Blockchain and present it to the wide public.
These three elements not only make XSQ a perfect partner for Tokoin in achieving MSME industry’s goals but also play a big role in aiding the world’s technological advancement progress.
