Policy and Regulatory Considerations for Foundational Elements 34 Authors and Contributors This note is part of a series of technical notes developed for the “Fintech and the Future of Finance” report, a joint effort by the World Bank and the International Financial Corporation. [...] These include higher cost of reaching and serving SMEs, relative to the revenue potential for lenders, information asymmetries that lead to non-availability of financial and credit data needed by lenders to assess creditworthiness of SMEs and, from the SME side, lack of collateral, lack of financial literacy, and difficulties in registration and verification. [...] Introduction The objectives of this technical note are to provide an overview of how digital technologies are helping to address the main barriers/frictions to financing for SMEs through the adoption of fintech solutions; present the impact on the incumbents and the implications for market structure; discuss the challenges and risks these fintech solutions pose; and present policy recommendations. [...] However, the value of such collateral, and its impact on the availability of finance, is strongly related to the existence of frameworks and institutions that enable identification, valuation, registration, and ultimately, efficient monitoring and enforcement of collateral. [...] The tokenization of the warehouse receipt allows a buyer or financial institution to purchase or take a security interest in the token to finance the SME producer in manners not possible without DLT, with the final holder of the token having the right of possession of the physical warehoused goods.
- Pages
- 51
- Published in
- Canada
