Through Precise Utilization of Use Cases, Tokoin Helps MSMEs to Embrace Financial Inclusion – Many research studies affirm that the most hindrance to the growth rate of MSME business is the lack of access to funding from financial institutions. Without convenient access to the source of fund, such as bank credit, MSMEs’ business growth will be stuck at where they start off.

For example, a merchant who needs to double his profit has to double his moving capital. Usually, he will resort to using personal wealth or loans from close relatives. However, it doesn’t always work out well as planned. Commonly, he won’t get the exact nominal as desired in the first place.

Bank credit can be a solution as the bank is very likely to give the exact amount needed according to the credibility of an applicant. In the case MSMEs, the longer they have run their business and managed it well, the more credible their profile will be.

However, in reality, MSMEs often get refusal when applying for a bank loan. Banks which provide commercial loans prefer to allocate their resources to larger firms rather than MSMEs. According to banks, higher default risks, the lack of financial transparency, and the lack of assets for a mortgage are major factors which prevent them from lending money to SMEs.

The ugly fact is that with more than 400 million MSMEs in developing countries, which account for more than 90% of the world’s businesses, 40% of them have difficulties in accessing business assistance from various financial institutions. They are constrained by the requirements to prove the credibility of their business, usually because they cannot provide a complete record of financial transactions.

Data source: Otoritas Jasa Keuangan (OJK)

Aiming to support the industrial sector with targeted utilization of its use cases, Tokoin carries the mission to help MSMEs which often find it difficult to grow their business. Tokoin brings together the convenient ‘meet-the-needs’ concept between Tokoin’s users and its partners, such as financial institutions, insurance companies, and property business.

Tokoin makes use of blockchain technology, combining digital identity and digital ledger to build MSMEs’ credit scoring and to increase their economic scale. This technology has a similar function to a bank account for its transactional recording.

Therefore, Tokoin facilitates MSMEs to have a better record of financial transactions as a form of credit history to build the credibility status of their business. The transaction history of the MSMEs can guarantee feasibility for them to access various business solutions.

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Author: Tokoin Official

TOKOIN is a platform that establishes the identity of MSMEs as an acceptable reputation in the business ecosystem. TOKOIN presents a better and modern business ecosystem that offers valuable partnerships to address inclusive growth. As a platform, TOKOIN captures and processes business information from the users as a valuable asset, which, in our ecosystem, translates to the trusted reputation of the MSMEs as our users to access previously inaccessible financial business services from providers which act as our partners. Therefore, TOKOIN links the business and financial sectors to launch a scheme of financial inclusion. The partnerships formed in TOKOIN will subsequently contribute to the national economic growth.