An analysis on the challenges encountered by European SMEs, in relation to lending and investing, and the prospect of a P2P blockchain lending platform

Abstract

SMEs occupy a significate role both in the Maltese economy as well as in the EU. However, such enterprises are encountering several difficulties and barriers which inhibit them for acquiring financial aid from financial institutions. Therefore, the aim of this dissertation is to identify these hurdles encountered by SMEs and assess the appetite of a Blockchain-based P2P microfinance platform. Apart from examining the challenges of SMEs and the benefits of Blockchain application in the microfinance space, through available literature, the researcher also designed a business model for a Blockchain-based P2P microfinance platform, named SMEAid. The purpose of this business model is to help reader visualise the potential of Blockchain application in this particular subject The researcher conducted seven semi-structured virtual interviews with participants who either have an involvement with SMEs or lending services. The participants were also presented with the business model and requested to fill in a Competitive Analysis matrix. The matrix scoring was then interpreted by Pugh Matrix whereas the interview responses were analysed and compared to the literature. The results show an overall acknowledgement of the potential of Blockchain technology in overcoming the challenges currently experienced by SMEs when requesting for funds. Nonetheless, the feedback acquired from the interviews, related to the acceptance of a Blockchain-based P2P microfinance platform, suggest that the participants are still yet to be fully on board with the technology applications. However, based on the judgement of the participants, increased knowledge on the subject, a strategic financial and marketing plan could enhance the potential uptake of Blockchain-based P2P microfinance platforms.