The socio-economic implications of the coronavirus global pandemic are going to be substantial. The Covid-19 crisis has not only has a detrimental effect on global healthcare systems but also has largely impacted every aspect of human life as we know it. As the cascading effects of the pandemic continue to affect the global economy, upending trade and commerce, Micro, Small, and Medium Enterprises (MSMEs) have been hitting hardest due to the prolonged lockdown. With fears of a serious recession and potential financial collapse, countless MSMEs need immediate relief.
What are MSMEs Actually Facing?
The drastic effects of the novel coronavirus are crippling industries across various sectors and the economy as a whole. Recently, amidst the recession, a Congressional report stated that foreign investors pulled out an estimated $26 billion from developing Asian economies and over $16 billion out of India, which will escalate the economic recession in Asia. With more such events across the globe, the economic activities have come to a halt. This has lead MSMEs grappling with problems like cash flow, low liquidity, and lack of available workers. In developing economies, MSMEs represent 60%-70% of jobs and around half of the economic activities.
Various threats faced by MSMEs for their survival are:
- Reduced demand and access to liquidity: Most often, MSMEs have small cash reserves, therefore these enterprises are the first ones to go out of business in case of a liquidity shock. Another issue has been the continuously plunging demands for the products and services provided by these businesses and entrepreneurs. Apart from this, MSMEs are also suffering from delayed payment from many buyers who have already received their orders. Among these, the enterprises that trade internationally are the most vulnerable, as they depend on access to increasingly scarce US dollars to fund a variety of their costs.
- Hardship in accessing inputs and managing inventory: The broken supply chain has reduced the production for the MSMEs dramatically. Mostly, MSMEs source their raw inputs from abroad, but owing to coronavirus, the supply chains have become longer and more complex impacting the production activities of these businesses. Supply chain disruptions such as grounded airlines have created huge logistic issues for these MSMEs.
AladiEx Brings Blockchain Technology to Help Encounter the COVID-19 Crisis
Blockchain technology can simplify and unify the otherwise fragmented fundraising ecosystem in the most transparent and efficient manner. During such drastic times when MSMEs need support more than ever, AladiEx is rebuilding the economy by bringing actors across entire value chains to work together to restore trade. Opting for the blockchain technology as the main channel for MSME sector development opens a whole new world of opportunities which will serve as a foundation for the global MSME sector stability and success.
The AladiEx platform uses blockchain technology to provide a sustainable financial ecosystem for these MSMEs to rebalance and re-energize following the COVID-19 crisis. At AladiEx our vision is to support millions of MSMEs in raising funds for their operations in a hassle-free manner. AladiEx directly connects the investors with the businesses using the advantages of blockchain technology with its borderless, secure, and highly rewarding digital platform. The use of Blockchain technology makes fundraising transparent and trustless, and when aided with Key Performance indicators, Investors can track if the startup is performing as per their expectations or not.
This ecosystem gives you the opportunity to be on the global stage accessing funds globally with low-costs and barriers by leveraging the potential of blockchain to access innovative sources of capital. AladiEx’s innovative launchpad helps you to tokenize your project and raise funds from purchasers spread across the world. For more details visit https://aladiex.io/ and make your business global using the Blockchain.
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