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Blockchain Bank Could Transform Small Business In China

By

Dan

Cummings

WriterETHNews.com

Small Businesses in China could be revolutionized by the new blockchain-based billing platform.

On March 15, 2017, Ganzhou Bank deployed the first implementation of the national blockchain-based billing platform in China. The platform is part of an alliance with seven other local banks and blockchain research startup Shenzhen Blockchain Financial Services to increase reliability and speed of transactions for financial services within the country. Since its initial launch, the Ganzhou bank has conducted transfers of an estimated 30 million RMB (China’s official currency, Renminbi) and completely transformed the medium, small, and micro-size enterprises (MSME) in China. 

As of April 14, the Ganzhou bank has completed 60 loans for 30 MSMEs for a total of 34.0214 million yuan. It appears the system has caught the attention of MSMEs who see promise in the succulent low-interest loans - currently averaging at 5.18 percent. According to one report, the bank will issue loans for periods of time that vary from 17 days to 6 months, which suggests that the companies are optimistic about paying their debts and the state of the economy. This can only be a good sign for the Chinese, as MSMEs are a crucial piece to the Chinese economy.

A 2015 China MSME behavior analysis report revealed that 99.7 percent of enterprises in China were MSMEs. Furthermore, MSMEs contribute to more than 60 percent of the countries fixed asset investment and account for 80 percent of the country’s labor market. However, despite their large presence, MSMEs continue to struggle financially. As a result, in 2016, the Chinese government took steps toward increasing the financial health of the private sector by developing policies that inspire growth within MSMEs, especially in the financial services industry. In an exclusive meeting on July 27, Premier Li Keqiang stated:

 “All government departments concerned should take concrete measures to support the healthy development of small and micro businesses. This is, in turn, an effective way to protect the finance sector from such risks.”

According to its website, the Ganzhou Bank intends to take on a larger role in financing MSME businesses throughout China by being committed to the “technology pilot” strategy. At the time of this publication, it is unclear how the seven other banks in the alliance are performing, but if this type of platform is implemented nationwide, increased growth could be expected throughout the Chinese MSMEs.

Dan Cummings

Dan is a Los Angeles-based musician, writer, and veteran passionate about science and technology, current events, human rights, economic impacts, and strategic calculus.

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