Member-only story
How DeFi could solve SME cashflow headaches
Cashflow-hungry small and medium businesses, particularly crypto-native companies, are starting to look beyond banks for their small business finance needs. Enter the world of decentralized finance (DeFi).
In our post-covid world, small businesses, including tech startups and scaleups, are feeling the pinch. Inc reports that 80 per cent of small businesses are failing due to cash flow shortfalls. Aside from repeated lockdowns, supply chain issues and mental health challenges, banks have put the nail in the coffin for many SMEs because of a downturn in loan approvals.
As small businesses look for alternative solutions to their banking woes, blockchain-driven finance solutions are looking more and more enticing. So, why DeFi, and how does it help business growth?
What is DeFi?
Decentralized finance (DeFi) comprises blockchain-based finance applications that are automated, decentralized and fast. DeFi transactions occur via decentralized apps (dApps). These, essentially, have the power to democratize finance for retail investors and small businesses that rely on the need for high liquidity.
