Tokoin.io – Aiming to support MSMEs to get easier access in order to accelerate their businesses, Tokoin conducts roadshows to several cities and countries which have the characteristics of an emerging market throughout Asia. After Indonesia, Hong Kong, and Singapore, today Tokoin’s team visited Vietnam.
As one of the developing countries in Asia, Vietnam has attained remarkable economic growth and sustainability. In line with the country’s economic development, small and medium-sized enterprises have also experienced incredible growth.
Small and medium-sized enterprises play a major role in Vietnam as the country’s economic driving force. In numbers, Vietnam’s SMEs account for 98% of all enterprises, 40% of GDP, and 50% of employment. The number of SMEs also rose by around 100,000 in 2016.
However, despite those phenomenal achievements, Vietnam’s SMEs remain weak in terms of internal and external networking, competitiveness, innovativeness, human resources, and readiness for globalization. Apart from SMEs’ low starting points, these shortcomings and weaknesses have been largely due to the prolonged discrimination against the private sector regarding access to capital or credit and land, lack of a pro-private and competitive business environment, and the poor quality of human resources and business development support services. As such, SMEs continue to face problems, including access to finance, access to market, and competition with foreign firms.
Similar to the common problems which MSMEs face in many other countries, credit access is a major concern for the Vietnamese SMEs. Banks providing commercial loans prefer to allocate their resources to larger firms rather than SMEs. According to banks, higher default risks, the lack of financial transparency, and the lack of assets for a mortgage are major factors for not providing loans to SMEs.
The other issues are market access and supply chain problems. As of 2017, only 21% of Vietnamese SMEs were linked with global supply chains, much lower than Thailand, at 30%, and Malaysia, at 46%. Integrating further with global supply chains in terms of procurement, operations, and sales will allow firms to manage competition, reduce risks, and reduce production costs, which currently are 20 percent higher than those of neighboring countries, such as Thailand and China.
Those problems make it even harder for SMEs to compete with larger firms; most of them do not even manage to survive during their first five years. Responding to this, Tokoin aims to solve the problems by offering a platform that provides easy access for MSMEs to accelerate. As a platform that leverages blockchain technology to establish a valid identity and reputation of MSMEs, Tokoin’s blockchain platform records every transaction as a set of data that can be used to conform to financial transparency requirement. This will become a solution that allows Tokoin’s users to build a trusted profile with security for all stakeholders in the ecosystem.
Our approach is by enabling the blockchain technology on our platform, combining digital identity and digital ledger to build MSMEs’ credit scoring. The idea is to bring prosperity to MSMEs. In this modern business ecosystem, Tokoin allows MSMEs to have financial records similar to those of the banks. Every transaction that is initiated on Tokoin’s platform is accurately recorded with timestamps.
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