Authors: Tuhu Nugraha and Temmy Debora*
Within the midst of the speedy digital period, blockchain know-how emerges as an innovation with the potential to revolutionize the worldwide monetary business. In Indonesia, SMEs managed by ladies stand as one of many sectors that may reap vital advantages from this know-how. SMEs play an important function within the nationwide economic system, with over 64.2 million enterprise models contributing 61.9% to the GDP and using as much as 97% of the workforce.
Nonetheless, many SMEs face challenges, starting from entry to financing to advertising and marketing points and productiveness. With the federal government’s monetary inclusion goal set at 90% for 2024, the function of SMEs, particularly these managed by ladies (which account for 64.5% of all SMEs), turns into pivotal. Subsequently, selling monetary inclusion for feminine entrepreneurs has a strategic influence in reaching this goal.
Right here’s how blockchain is usually a resolution to boost monetary inclusion for feminine SME entrepreneurs in Indonesia:
Entry to Financing
Based mostly on information from the Ministry of Communication and Data, solely 20 million out of 64 million SMEs have accessed formal monetary establishments. One of many essential causes many SMEs, particularly these managed by ladies, wrestle to entry formal monetary establishments is because of stringent necessities. Many SMEs lack formal paperwork like audited monetary statements, bodily collateral, or a great credit score historical past. Furthermore, the prolonged and bureaucratic mortgage software course of usually turns into a barrier for SMEs to acquire working capital.
Blockchain know-how affords a monetary inclusion resolution for female-managed SMEs in Indonesia, usually hindered by strict necessities and prolonged processes in formal monetary establishments. With a blockchain-based lending platform, female-managed SMEs can entry financing with a less complicated, clear, and environment friendly course of. Direct interplay between lenders and debtors reduces transaction prices, whereas blockchain transparency enhances belief. Moreover, another credit score evaluation mannequin based mostly on SME transaction information permits these with out a formal credit score historical past to nonetheless receive financing.
Low Transaction Prices
Transaction prices play a major function in SME operations. For a lot of SMEs, particularly these transacting in small quantities, excessive transaction prices can considerably erode revenue margins. This turns into much more vital for female-managed SMEs who might need restricted preliminary capital and smaller operations in comparison with different SMEs.
Blockchain know-how affords an answer to scale back these transaction prices. With its decentralized nature, blockchain eliminates the necessity for intermediaries like banks or different monetary establishments. Which means charges usually charged by intermediaries – equivalent to administrative charges, switch charges, or different costs – will be eradicated or drastically lowered.
When in comparison with the rates of interest at present borne by SMEs from mortgage sharks, the distinction turns into stark. Mortgage sharks usually supply loans with very high-interest charges, generally reaching 20% to 40% per thirty days. That is a lot increased in comparison with rates of interest from formal monetary establishments. With blockchain, female-managed SMEs can’t solely cut back transaction prices but additionally probably entry financing at decrease rates of interest via blockchain-based peer-to-peer lending platforms.
Thus, adopting blockchain know-how can present twin advantages for female-managed SMEs: lowering transaction prices and offering entry to cheaper financing, thereby enhancing their revenue margins and competitiveness out there.
International Funds
Within the midst of globalization, female-managed SMEs in Indonesia discover alternatives to penetrate worldwide markets. Nonetheless, a disparity is clear: though SME exporters account for 77.28% or about 13,775 exporters, their contribution is just 4.09% or 6.331 million USD of whole exports. In distinction, large-scale exporters, which solely account for 22.72% or 4,044 exporters, dominate with a contribution of 95.9% or 148.609.7 million USD, as acknowledged by the Director of Export Market Growth of the Ministry of Commerce in 2023. One of many essential challenges confronted by female-managed SMEs is cross-border transactions. Lots of them discover it tough to entry worldwide fee platforms, equivalent to PayPal, as a consequence of language obstacles and complicated administrative necessities. Excessive transaction charges and lengthy settlement instances via standard banks add to their burden. As an answer, blockchain know-how and cryptocurrencies emerge, providing less complicated transactions, decrease charges, and better safety. With an interface that helps the Indonesian language and with out the necessity for a standard checking account, female-managed SMEs now have a better alternative to compete extra successfully on the worldwide stage.
Digital Id
Feminine-managed SMEs, particularly in distant areas, usually face challenges in accessing monetary companies equivalent to loans or insurance coverage. Considered one of their essential obstacles is the shortage of formal identification paperwork, equivalent to nationwide ID playing cards, household playing cards, or proof of land possession, usually required by banks or different monetary establishments. With out these paperwork, they’re usually marginalized from the formal monetary system. Nonetheless, blockchain know-how affords an modern resolution to this drawback. Think about blockchain as a safe digital ledger, the place each piece of knowledge entered can’t be altered or deleted. With this know-how, female-managed SMEs can have a “digital identification” registered on the blockchain. This identification can include fundamental info equivalent to identify, tackle, enterprise transaction historical past, and extra. Most significantly, this identification is safe and verified. By having a blockchain-based digital identification, female-managed SMEs in distant areas can display to monetary establishments that they’re professional and reliable enterprise entities. This makes it simpler for them to use for loans, open financial institution accounts, or entry different monetary companies that had been beforehand arduous to succeed in. In different phrases, blockchain gives a possibility for female-managed SMEs to combine into the formal economic system, enhancing their enterprise development potential.
Blockchain gives modern options for female-managed SMEs in Indonesia, particularly in distant areas. There, they usually face varied challenges, from insufficient training, restricted capital, to an absence of supporting infrastructure. However why deal with female-managed SMEs? As a result of in lots of circumstances, these ladies are the principle pillars of the household. They play an important function in efforts to interrupt the chain of poverty, hoping to supply higher training for future generations. With the assistance of blockchain know-how, monetary inclusion will be expanded, social disparities will be lowered, and alternatives for female-managed SMEs to enhance their households’ high quality of life turn into even better.
*Temmy Debora, CEO and Founder Nakama.id, & Web3 Trailblazer Indonesia
