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Promoting Financial Inclusion for Female-Managed SMEs Through Blockchain Technology



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By Tuhu Nugraha and Temmy Debora*

In the midst of the rapid digital era, blockchain technology emerges as an innovation with the potential to revolutionize the global financial industry. In Indonesia, SMEs managed by women stand as one of the sectors that can reap significant benefits from this technology. SMEs play a crucial role in the national economy, with over 64.2 million business units contributing 61.9% to the GDP and employing up to 97% of the workforce.

However, many SMEs face challenges, ranging from access to financing to marketing issues and productivity. With the government’s financial inclusion target set at 90% for 2024, the role of SMEs, especially those managed by women (which account for 64.5% of all SMEs), becomes pivotal. Therefore, promoting financial inclusion for female entrepreneurs has a strategic impact in achieving this target.

Here’s how blockchain can be a solution to enhance financial inclusion for female SME entrepreneurs in Indonesia:

Access to Financing

Based on data from the Ministry of Communication and Information, only 20 million out of 64 million SMEs have accessed formal financial institutions. One of the main reasons many SMEs, especially those managed by women, struggle to access formal financial institutions is due to stringent requirements. Many SMEs lack formal documents like audited financial statements, physical collateral, or a good credit history. Moreover, the lengthy and bureaucratic loan application process often becomes a barrier for SMEs to obtain working capital.

Blockchain technology offers a financial inclusion solution for female-managed SMEs in Indonesia, often hindered by strict requirements and lengthy processes in formal financial institutions. With a blockchain-based lending platform, female-managed SMEs can access financing with a simpler, transparent, and efficient process. Direct interaction between lenders and borrowers reduces transaction costs, while blockchain transparency enhances trust. Additionally, an alternative credit assessment model based on SME transaction data allows those without a formal credit history to still obtain financing.

Low Transaction Costs

Transaction costs play a significant role in SME operations. For many SMEs, especially those transacting in small amounts, high transaction costs can significantly erode profit margins. This becomes even more critical for female-managed SMEs who might have limited initial capital and smaller operations compared to other SMEs.

Blockchain technology offers a solution to reduce these transaction costs. With its decentralized nature, blockchain eliminates the need for intermediaries like banks or other financial institutions. This means that fees typically charged by intermediaries – such as administrative fees, transfer fees, or other charges – can be eliminated or drastically reduced.

When compared to the interest rates currently borne by SMEs from loan sharks, the difference becomes stark. Loan sharks typically offer loans with very high-interest rates, sometimes reaching 20% to 40% per month. This is much higher compared to interest rates from formal financial institutions. With blockchain, female-managed SMEs can not only reduce transaction costs but also potentially access financing at lower interest rates through blockchain-based peer-to-peer lending platforms.

Thus, adopting blockchain technology can provide dual benefits for female-managed SMEs: reducing transaction costs and providing access to cheaper financing, thereby enhancing their profit margins and competitiveness in the market.

Global Payments

In the midst of globalization, female-managed SMEs in Indonesia find opportunities to penetrate international markets. However, a disparity is evident: although SME exporters account for 77.28% or about 13,775 exporters, their contribution is only 4.09% or 6.331 million USD of total exports. In contrast, large-scale exporters, which only account for 22.72% or 4,044 exporters, dominate with a contribution of 95.9% or 148.609.7 million USD, as stated by the Director of Export Market Development of the Ministry of Trade in 2023. One of the main challenges faced by female-managed SMEs is cross-border transactions. Many of them find it difficult to access international payment platforms, such as PayPal, due to language barriers and complex administrative requirements. High transaction fees and long settlement times through conventional banks add to their burden. As a solution, blockchain technology and cryptocurrencies emerge, offering simpler transactions, lower fees, and higher security. With an interface that supports the Indonesian language and without the need for a conventional bank account, female-managed SMEs now have a greater opportunity to compete more effectively on the international stage.

Digital Identity

Female-managed SMEs, especially in remote areas, often face challenges in accessing financial services such as loans or insurance. One of their main obstacles is the lack of formal identity documents, such as national ID cards, family cards, or proof of land ownership, typically required by banks or other financial institutions. Without these documents, they are often marginalized from the formal financial system. However, blockchain technology offers an innovative solution to this problem. Imagine blockchain as a secure digital ledger, where every piece of information entered cannot be altered or deleted. With this technology, female-managed SMEs can have a “digital identity” registered on the blockchain. This identity can contain basic information such as name, address, business transaction history, and more. Most importantly, this identity is secure and verified. By having a blockchain-based digital identity, female-managed SMEs in remote areas can demonstrate to financial institutions that they are legitimate and trustworthy business entities. This makes it easier for them to apply for loans, open bank accounts, or access other financial services that were previously hard to reach. In other words, blockchain provides an opportunity for female-managed SMEs to integrate into the formal economy, enhancing their business growth potential.

Blockchain provides innovative solutions for female-managed SMEs in Indonesia, especially in remote areas. There, they often face various challenges, from inadequate education, limited capital, to a lack of supporting infrastructure. But why focus on female-managed SMEs? Because in many cases, these women are the main pillars of the family. They play a crucial role in efforts to break the chain of poverty, hoping to provide better education for future generations. With the help of blockchain technology, financial inclusion can be expanded, social disparities can be reduced, and opportunities for female-managed SMEs to improve their families’ quality of life become even greater.

Tuhu NugrahaTuhu Nugraha is a Digital Business & Metaverse Expert Principal of Indonesia Applied Economy & Regulatory Network (IADERN)

Temmy Debora, is the CEO and Founder, & Web3 Trailblazer Indonesia

Courtesy: Modern Diplomacy

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Aeon Bank Officially Launches Malaysia’s First Islamic Digital Bank




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Aeon Bank (M) Bhd has officially launched Malaysia’s first Islamic digital bank, marking a significant milestone in the country’s banking sector. The launch aims to provide comprehensive, Shariah-compliant digital banking solutions to all Malaysians, setting a new standard for financial services in the region.

Comprehensive Shariah-Compliant Solutions

At the public launch ceremony, Chief Executive Officer Raja Teh Maimunah Raja Abdul Aziz outlined the bank’s vision. “We aim to offer safe, simplified, and inclusive Shariah-compliant digital banking solutions such as savings accounts, retirement savings plans, various borrowing options, and payment services,” she stated. “This will allow us to offer financial services to our customers comprehensively, helping us achieve our mission.”

Innovative Banking Products

The Islamic Digital Bank’s services currently include personal banking products like Savings Account-i and customizable Savings Pots with optimization features. These products were developed and refined through extensive testing phases. Raja Teh Maimunah highlighted the success of the beta testing phase, which involved over 1,800 participants over 12 weeks. “The beta test was meant to identify any necessary improvements and fixes. We received a lot of positive feedback on the overall architecture. We did not rush the test and also conducted an alpha test before the beta, ensuring platform stability,” she explained.

Seamless User Experience

Users who activate their Aeon Bank account will immediately gain access to their virtual Aeon Bank x Visa Debit Card-i and can request a physical Debit Card-i. To celebrate the public launch, Aeon Bank is offering a sign-up bonus of 3,000 Aeon Points and triple Aeon Points for transactions using the Aeon Bank x Visa Debit Card-i, along with a profit rate of 3.88% per annum.

Additionally, Aeon Points Programme members will have their memberships automatically linked with the Aeon Bank (M) app, providing extra benefits and rewards to Aeon Group’s outlets and merchants.

Revolutionizing Digital Banking in Malaysia

Jointly owned by Aeon Financial Service Ltd and Aeon Credit Service (M) Bhd, both subsidiaries of Japan’s largest retail group Aeon Group, Aeon Bank is set to revolutionize digital banking in Malaysia. Raja Teh Maimunah expressed optimism about the bank’s potential to perform detailed financial analyses and promote financial inclusion.

Competitive Landscape

In addition to Aeon Bank, a consortium led by KAF Investment Bank Sdn Bhd has also secured an Islamic digital bank license from Bank Negara Malaysia. Other recipients of digital banking licenses include a consortium of Boost Holdings Sdn Bhd and RHB Bank Bhd, a consortium led by GXS Bank Pte Ltd and Kuok Brothers Sdn Bhd, and a consortium led by Sea Ltd and YTL Digital Capital Sdn Bhd.

Promoting Financial Inclusion

With the launch of Malaysia’s first Islamic Digital Bank, Aeon Bank is poised to make significant strides in promoting financial inclusion. The bank’s innovative products and services are designed to cater to the diverse needs of Malaysian consumers, providing them with Shariah-compliant, convenient, and efficient banking solutions. This initiative aligns with the broader goals of enhancing financial accessibility and inclusion across the country.

As Aeon Bank continues to expand its offerings and reach, it is expected to play a pivotal role in shaping the future of digital banking in Malaysia. By leveraging advanced technology and adhering to Shariah principles, Aeon Bank aims to provide a robust banking platform that meets the evolving needs of its customers. The successful launch of Malaysia’s first Islamic Digital Bank marks a new era in the country’s financial landscape, promising a future of inclusive, innovative, and customer-centric banking services.

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Crypto Miners See ‘Enormous Potential’ in the Gulf




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  • Crypto miners drawn to Gulf
  • Electricity is 80% of cost
  • Tech-savvy population

With cryptocurrencies edging up again after last weekend’s “halving” – in which the rewards Bitcoin miners get for solving problems is cut in two to maintain scarcity – these are heady days for holders of Bitcoin and other virtual currencies. Bitcoin miners have been attracted to the Gulf by cheap electricity and established infrastructure.

“GCC countries have enormous potential in relation to the development of the Bitcoin mining sector,” Abdumalik Mirakhmedov, executive president of Dubai-based Bitcoin miner GDA, told AGBI. “In the past year, the region has been experiencing active growth, with several significant launches.”

Bitcoin “mining” is a process in which information in a blockchain block is validated by specialist machines. When a complex solution is reached by this equipment, a reward – in the form of Bitcoin and fees for the work done – is then issued. Initially, mining was often done in back rooms and sometimes-unofficial data centres. These days, however, it is increasingly dominated by larger businesses.

This equipment, however, also requires a lot of electricity.  In 2023, the Cambridge Bitcoin Electricity Consumption Index (CBECI) estimated global electricity usage associated with Bitcoin mining to be around 120 terawatt hours – about the same as Australia’s total electricity consumption that year.

Working day and night, Bitcoin miners also generate a lot of heat.  In colder climates, this has sometimes been repurposed to provide heating.  In the Gulf, however, the heat creates even greater electricity consumption, as powered cooling systems are used to keep the machinery within its operational temperature range.

A further problem in the Gulf recently has often been the lack of a clear regulatory framework for the industry – sometimes because of a general suspicion of cryptocurrencies.  Kuwait, for example, has banned all virtual asset transactions, investments and mining. In Saudi Arabia and Qatar, crypto has only quasi-legal status.

Yet, despite the obstacles, “the GCC region is the world’s sixth-largest adopter,” said Paige Aarhus, Paris-based director of crypto news and analysis site DL News. And figures from Chainalysis, a US-based cryptocurrency software development company, estimate that total crypto transaction levels in Saudi Arabia alone amounted to $36 billion and in the first two months of 2024 it hit $6 billion.

In the UAE and Oman, too, a more positive approach has been taken. A regulatory framework has been established, enabling facilities such as the DMCC Crypto Centre in Dubai to provide a wide range of services, including mining. In Oman, $800 million is now invested in crypto mining in the Sultanate. Abu Dhabi’s Green Data City in Salalah was Oman’s first licensed mining entity, while Exahertz International has also now joined it in the southern – and slightly cooler – Omani city.

Power plays

With electricity representing around 75-80 percent of a data farm’s average cost, cheap power is a major draw for miners when it comes to the Gulf. In Oman, although subsidies for electricity are being phased out, typical costs remain at around $0.05 per kilowatt – much less than the US average of $0.23, which is itself lower than average tariffs in Europe. “Innovations such as liquid cooling and immersion cooling are expected to significantly contribute to the expansion of operations within the region,” says Mirakhmedov.

This was recognised at the recent Global Digital Mining Summit hosted by mining server manufacturer Bitmain, held in Muscat. The “Hydro-mining Wins in the Desert” gathering highlighted progress in water cooling.

Green, renewable energy from solar is also available in abundance in Oman and other Gulf countries, providing miners with more sustainable credentials. At the same time, the Gulf offers a developed infrastructure and few restrictions on land for large data farms.

Oman, and other Gulf states, have also all invested heavily in education and training in IT, producing large, tech-savvy populations. “Key benefits of the Gulf also include the region’s access to capital and the ease of doing business,” says Mirakhmedov.  These benefits may help Gulf miners weather the storm of the recent halving.

Larger mining companies, or groups of miners, stand a better chance of absorbing that loss, while “some smaller mining companies may well go out of business as a result,” Aarhus says. With miners in the Gulf generally larger operations with lower overall costs, they may now be well placed for further expansion. More data farms could therefore be springing up around the region, in the months to come.

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Zakat on Stocks and Shares: A Modern Dilemma Solved




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In today’s fast-paced world, where the buzz of the stock market is as familiar as morning coffee, a timeless tradition meets the modern age: the practice of paying Zakat on stocks and shares. This intersection of faith and finance might seem like a modern dilemma, but “Zakat on Stocks and Shares: A Modern Dilemma Solved” can be achieved with a blend of ancient wisdom and contemporary understanding. Let’s dive into the world of stocks, shares, and spiritual duty, and discover how this blend enriches both our wallets and our souls.

Understanding Zakat in the Digital Age

Zakat, one of the Five Pillars of Islam, is a form of almsgiving to the less fortunate, calculated as a percentage of one’s wealth. Traditionally, it applied to tangible assets like gold, silver, and livestock. But what happens when your wealth is tied up in the intangible world of the stock market?

Imagine you’re in a vast, bustling city where skyscrapers are filled with traders, analysts, and investors, all meticulously tracking the rise and fall of stocks. In this modern jungle, your investments grow, sometimes unpredictably, reflecting not just your financial acumen but also the global economic heartbeat. Here lies our modern dilemma: how do we apply the ancient practice of Zakat to this digital-age wealth?

Calculating Zakat on Stocks and Shares

The key to solving this puzzle lies in understanding the nature of your investment. Are your stocks purely for capital gain, or do they yield dividends from companies that deal in tangible goods and services? The answer guides how Zakat is calculated on these modern assets.

  1. For Long-Term Investment: If you hold stocks as a long-term investment, Zakat is due on their market value. Think of it as if you’re a farmer with fields (stocks) that grow crops (dividends). Just as a farmer would calculate Zakat on the harvest, you calculate Zakat on the annual value of your stocks.
  2. For Active Trading: If you’re an active trader, your stocks are akin to the goods in a merchant’s caravan, constantly moving and changing. Here, Zakat is calculated based on the total value of your trading portfolio at the end of the lunar year.

Stories from the Stock Market

Let’s take a moment to walk in the shoes of Aisha, a dedicated software engineer by day and a savvy investor by night. Aisha’s portfolio is a mix of long-term tech stocks and short-term trades in renewable energy. When the time comes to calculate her Zakat, she reflects on the nature of each investment. Her tech stocks, akin to a golden wheat field, are valued at their current market price, while her active trades are tallied up like a merchant’s inventory at year-end. This careful consideration ensures Aisha fulfills her spiritual obligations without overlooking her modern investments.

Similarly, Omar, a retired teacher with a passion for philanthropy, uses his dividends from healthcare stocks to support various charities. By calculating the Zakat on his shares, Omar turns his investments into a powerful tool for social good, illustrating how ancient practices can meet modern philanthropy.

Embracing Modern Dilemmas with Ancient Wisdom

The dilemma of paying Zakat on stocks and shares illustrates a broader lesson: that our faith and traditions are not static, but rather, they evolve with us. As we navigate the complexities of the modern financial world, we’re reminded of the adaptability and enduring relevance of Islamic teachings.

Zakat on stocks and shares: a modern dilemma solved, not just through numbers and calculations, but through the stories of individuals who bridge the gap between their faith and their finances. In doing so, they enrich not only their own lives but also the lives of those around them, weaving a tapestry of spiritual and material prosperity that spans the ages.

In conclusion, the practice of paying Zakat on stocks and shares: a modern dilemma solved, offers a fascinating glimpse into how timeless traditions adapt to contemporary realities. It’s a journey that not only addresses a modern financial challenge but also deepens our connection to our faith, our community, and the wider world. As we move forward, let’s carry this wisdom in our hearts and portfolios, ensuring that our investments reflect our values and contribute to a better world for all.

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