To minimize the employment rate in every country, the MSME industry must be effective and be backed with regular support.
As usual, micro, small and medium enterprises (MSMEs) according to development report shows they are among the largest employment providing sector across the globe. Not less than 70% of total employed people in ASIAN and other continent are from MSMEs sectors, check more details about that info here. Despite being the most demanded sector in an economy, the sector is still struggling to be effective. There are many challenges facing the MSMEs sector, the efficiency rate of that sector is far from the best. There is a recommendation that if all the challenges around MSME are solved, the rate of unemployment will definitely reduce. Fact is that, MSMEs sector needs an urgent reformation which will solve its pressing problems.
MSMEs NEED REFORM TO SOLVE ITS PRESSING ISSUES
Financing and taxation are the core challenges facing MSME industry. It is very unfortunate the industry find it difficult to get finance from the appropriate organization i.e financial institutions. The MSME industry needs to be reformed because the industry currently lacks finance, technology, start-up support and so many other issues.
The government has introduced many policies to help the sector, they have also launched and implemented many other programs to empower MSMEs; but unfortunately, none has been able to change the sector for better, it has low productivity and unsuccessful to solve various challenges in MSMEs sectors.
In order to bring solutions to the challenges facing MSME industry, we need to first identify the problem
The major problem of MSME sector now is, there is lack of proper data. Not having a proper data has undermines the support the government and other financial institutions ought to offer them
INSUFFICIENT DATA
In every business, there are always rules and principles ways of doing things. They have policy that stands as guidelines for their ecosystem. For a bank to fund your project or gives you loan, there are various information about you and your business they need to know. It is not just banks, almost all the financial institutes or even investors who desire to pump funds into a business will have to checkmate project information which includes checking out who owns the project, his credit score, the business goals and objectives, and so many other information. However, it is very unfortunate the MSMEs has no tangible information for their businesses. Investors and other financial institutions find it difficult to get accurate information that will give them confidence, and is the major reason why usually withdrawal from every proposer from MSMEs.
The inability of MSMEs to present adequate records about their business make them lack access to capital; rather, credit and loans goes to the few individuals with proper records.
A person that have adequate documents for himself and his business can get access to financial services even without collateral. MSMEs lacks of data make things difficult to approach the bank and the financial service providers also find it difficult to easily give them funds because they don’t know you.
REFORMING THE ECOSYSTEM
The integration of Fintech has a significant effects of enhancing MSMEs to access finance, this will build more trust between the financial service providers and the MSMEs. It is also enhance more credibility for them to have access to loans.
The MSME needs to rely on technology to achieve their business goals. Since almost 80% of people in the world can access the internet, make use of phone and website, make use of google and yahoo, the technology will enhance easy penetration in MSMEs ecosystem easily.
Building a digital capacity is the only left option for MSMEs to remain relevant and compete with other sectors. The technology can give a proper identity that are credible, the technology will also expand MSMEs business. The technology has features that provide basic infrastructure that will simplifies MSMEs business i.e at your comfort zone, you can make a transaction without going to the banks.
The technology will make things easier for MSMEs, it will make them stand side by side with any organisations across the globe, and they will be able to accountable more about their business.
TOKOIN BLOCKCHAIN PROJECT
The implementation of Blockchain Technology is the only means to rescue MSMEs of their financial woes. The Blockchain Technology will make credit easier for the MSMEs.
Tokoin aims is to build an ecosystem where MSMEs can build their database infrastructure on blockchain. Through this platform, people will be able to build a digital data which will qualify them to have access to financial services in an easier way.
The blockchain technology will make it easier for MSMEs to do a quick and swift transaction between them and their financial services providers. The banks and other investors can view and checkmate the MSMEs data through their phone and decided to offer them loans or other supports.
All MSMEs can build their profile information, their business plan and all other information on blockchain which will qualify them to meet up with the policy of financial services providers for offering them loan. The Tokoin platform will simplify things by building a decentralized application which individuals can install on their various devices to build their digital business profile. You find more details about this on their Telegram group.
CONCLUSION
Since micro, small and medium enterprises (MSMEs) has a lot of contribution to nations development and contribute to increase employment rate in a country, reforming the sector is the key and that is exactly what Tokoin is working to achieve. Building your digital business profile will give banks and investors the greenlight to offer financial support to the MSMEs. Finally, to reduce unemployment rate in a country, the MSMEs sector must be active and effective, they must have access to loans and credit at all needed period. Tokoin will help MSMEs build their business profile on blockchain, which will meet up with the passmark for acquiring financial support.
There are various summits organized to meet and discourse with the Tokoin team one on one.
The upcoming AMA meeting will be held in JAKARTA
Just registered here for the meetup.
You can hook up more with Tokoin project here