China’s Guangdong launches blockchain-based financing platform to help SMEs
The Guangdong government in China is in the news after it launched a blockchain-based financing platform on January 2, 2020, to help small companies receive loans at a faster pace from commercial banks, according to a local report.
This would be China’s first blockchain loan issuance platform for Small and Medium Enterprise (SME) financing. This government-led venture is supported by OneConnect, the Fintech firm backed by China’s Ping An Insurance.
The project followed an earlier initiative launched in July 2019, one that created a blockchain financing platform connecting Hong Kong and Macao to help small businesses make profits. The new venture, having accessed financial and administrative information of 26 government agencies via a blockchain network, also creates credit ratings for SMEs. This is the first in the nation to conduct commercial credit analysis, while also evaluating SMEs.
The report stated,
“As the nation’s first platform for conducting commercial credit analysis and evaluation of small and medium-sized enterprises across the region, the Guangdong Small and Medium Financial Platform combines the advantages of Guangdong Province as a major manufacturing province, foreign trade province, and scientific and technological innovation province through intelligent financing and intelligent supply.”
The director of Guangdong’s Local Financial Regulatory Bureau, Xiaojun He, spoke about the SMEs and the project stated,
“Borrowing money from commercial banks for small companies has been slow and expensive.”
As of now, the platform has made connections with 129 financial institutions such as the Industrial and Commercial Bank of China, Construction Bank, and Ping An Bank, among others. The new project thus will crucially help SMEs fight financing difficulties, while also optimizing the business environment to help improve the economy.