What is MSME?
First of all, we need to know about MSME. MSME means Micro, Small and Medium Enterprises. It has always been the backbone of most of the developing Economy. They have played an important role in achieving the economic goals in a developing country.
Why MSME need a Business Identity?
Business Identity means it creates an acceptable measure of trust for suppliers and financial institutions. It will help easier to understand the business background of the company. But MSME didn’t maintain a business identity as much as other large scales Enterprises. Because they have a small capital to run the business, sometimes it will give disadvantages to them.
Tokoin is a platform that establishes digital business identity and it mainly introducing for Micro, Small and Medium Enterprises ( MSME ) Create a digital business identity for MSME that represents a solid business reputation and utilizes their data to create more funding opportunity.
Although it appears some problems with high funding barriers, after the financial crisis, banks were sceptical of lending to MSMEs. They adhere to the generally accepted stereotype that MSMEs do not have enough cash flows to make loan payments. Overall, financial affordability is still low in emerging markets, as 65% of MSMEs even don’t have access to financing opportunities. It does often teaching most MSMEs don’t have proper legal documentation and long-term credit history. Most MSMEs do not produce enough to take advantage of economies of scale. They also have low order volumes, which means they have little influence on suppliers. This leads to higher production and transaction costs compared to large enterprises, and unlike corporations in which entire departments are involved in procurement and finance, MSMEs have fewer resources to find the best suppliers or appropriate financing. International expansion is also problematic.
These problems mean that they feel trapped in the cycle of high costs, minimal financial support and fierce competition. The heart of this cycle is a lack of trust on the part of institutions that would have to support the IHR to sustain and grow. Suppliers do not trust them, and banks do not trust them, and, ultimately, customers do not trust them. What is missing is MSME’s ability to build a reputation that builds trust and opens up a wide range of growth-enhancing services.
Through the blockchain network, you can verify data related to business transactions in the ecosystem. TOKOIN uses the data recorded on the blockchain network as a valid indicator of business reputation. In other words, this reputation will be built on the customer’s buying behaviour in trading activities, and this information will become an important part of the customer’s profile. With this approach, TOKOIN can transform an accurate data record into a valuable asset that the MSME can use as leverage to offset its missing lending requirements, such as a measure of reliability.
Digital identification
Responding to the needs of an authoritative and real person, Tokoin uses the digital sector as an aid and privilege. With a digital business identifier, MSME can record and track its business processes in a digital ledger, while distributing the credit rating they create to other partners in the Tokoin ecosystem. This is the decentralized nature of the blockchain, where there is no central point of power that records data. The use of blockchain technology in the business process.
Digital book
All transaction data from the MSME business transaction as a user will be stored in digital form, and at the same time, a computerized record called a digital ledger. Information starting with KYC to identify the initial business profile and more detailed information, such as cash flows, sales and income, and ordinary business purchases, is recorded as a valuable asset. This asset will also be compiled and processed, and it will be assigned a value in accordance with the depth of the information contained.
Service provider
Tokoin is also supported by partners who provide financial and business services such as business loans and loans, insurance services, logistics, delivery and warehousing. As a Tokoin user, MSME can choose business services based on their preferences as well as a development plan. For a service provider, this means that they can work closely with MSME, gaining access to their data and getting an overview of their potential customers.
