Bright, a blockchain-based decentralized financial services marketplace established by the founders behind AMPP Group, is working to close the credit gap faced by micro, small, and medium-sized enterprises (MSMEs) around the world.
Access to finance is essential for growing small businesses, and expanding operations through hiring new employees or purchasing inventory and equipment. Bright is developing a verified business data ecosystem using data provided by the MSMEs in addition to trusted data sources, all while keeping the data private, immutable, and owned by the MSMEs themselves. Through its ecosystem, Bright is solving the trust problem for small businesses globally and will help diminish the friction experienced by both MSMEs and the financial services sector in the lending process.
MSMEs are the foundation of emerging market economies, accounting for more than 95 per cent of businesses worldwide and responsible for more than 60per cent of employment globally. The World Bank estimates 600 million jobs will need to be created in the next 15 years to absorb the growing global workforce, and four out of five newly created positions will be created by MSME businesses. The issue is small businesses in fast-growing emerging markets such as India, Nigeria and Kenya are lacking access to financing of more $1.2 trillion dollars, resulting in a “credit gap”.
Bright will work to close this credit gap by providing the essential funds necessary to achieve success through a blockchain-based trust validation registry and financial services marketplace. Initially Bright itself will provide loans to businesses through BrightBank, and MSME businesses will have access to loans at affordable interest rates based on accurate and real-time assessments. Any MSME with access to a smartphone can apply for a loan, removing the need to visit a branch; which is sometimes a nearly impossible task in emerging markets where access to banks may be difficult. Additionally, credit assessments and lending decisions are arrived at instantaneously, saving the business owner time and effort.
Blockchain technology allows for business data to remain secure through cryptographic protection and decentralized storage, while also ensuring MSME data is controlled by the data owner, and the small business decides who can access their data.
In the second phase of the project, Bright opens its ecosystem to third-party financial services organizations creating a marketplace of lenders including banks, alternative lenders, and other institutional investors. This will not only give banks and other lenders are able to lend to the underserved MSME market, but will provide financial services companies access to alternative sources of business information to conduct credit risk assessment on MSMEs, making better lending decisions and reduce default rates.
“Our mission with Bright is to address the issues MSMEs face, head on,” said Pierre Proner, co-founder and CEO of Bright. “Small businesses in emerging markets experience limited access to finance, and thus face difficulty growing their businesses. By leveraging blockchain technology and data science, we are able to provide small businesses with loans and begin to close the credit gap that prevents them from becoming greater participants to the global economy.”
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