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Blockchain can help enhance small enterprises' business preparedness.

Blockchain typically enables multiple parties to see and write entries into a record of data within a single network. Having distributed databases, blockchain delivers a secure, transparent, and cost-effective way to store information and facilitate transactions. It also allows businesses to keep track of their assets. This technology has the potential to assist in bringing products and transactional services to market quickly at a reasonable cost, and delegate the expensive security, Know Your Customer (KYC) protocols, data storage and other overheads.

Companies like Microsoft, Amazon and IBM, among others, already offer blockchain-as-a-Service. These third-party services are a relatively new development in the field of blockchain, reflecting the increasing demand of hosting decentralized software services to foster market growth.

For SMEs, blockchain holds much promise. As Small and Medium-sized Enterprises (SMEs) are the backbone of the economy in many countries, they are confronted with a different number of challenges. Limited access to bank loans, inefficient processes and deficiency of information necessary to conduct business efficiently are among major challenges where blockchain can make a difference. This can open new opportunities to SMEs in every sector and enable them to optimize their business, and develop new business models.

Experts believe that blockchain can deliver the same financial access tools to SMEs that are currently available to large firms. In spoke to Cointelegraph, Nick Williamson, the chief executive of U.K.-based fintech firm Qadre said: “While SMEs have historically been the largest driving force in GDP growth and job creation, there has been a long term shift to larger companies over the past decades, partially due to the ability for large companies to access capital markets efficiently.”

Blockchain can help SMEs to build smarter and more secure supply chains. It can assist in tracing each transaction from point of origin to point of sale through a transparent and traceable audit trail in real time.

Today, as the world grapples with the crisis caused by the COVID-19 outbreak, SMEs are facing a lot of challenges and struggling to survive in this uncertain time. Small businesses around the world have been hit extremely hard by the impact of the pandemic as they cope with reduced demand, disrupted supply chains and worsening lack of finance.

Even before the COVID-19 outbreak, less than 15 percent of SMEs in fast-growing economies had access to the credit they needed to grow. Considering data from the International Finance Corporation (IFC), the unmet financing need of SMEs in these markets is a staggering US$5.2 trillion every year. 

On the other side, as the pandemic has disrupted the global supply chain, blockchain technology can help tackle supply chain failures as well as reinforce the economic recovery process. In April, the World Economic Forum (WEF) has released a blockchain deployment toolkit to assist organizations to improve future pandemic preparedness and stimulate an economic rebound post COVID-19. With this release, the organization is aimed at assisting leaders to maximize the benefits and lower the risks of the technology.