Small businesses in developing countries face many financial challenges that stablecoins can address. DLTPAY, a Web3 payment and DeFi platform, offers a unified solution to access stablecoin operations and other Web3 services.
Small and medium enterprises (SMEs) serve as the backbone of global economic development, comprising 90% of all businesses and accounting for 50% of worldwide employment, according to the World Bank. Their contributions span the gross domestic product (GDP) of developing and developed countries, but emerging economies depend even more on them.
Overcoming financial barriers for emerging economies
In Sub-Saharan Africa, a region home to 44 million SMEs, these enterprises sustain 80% of the populace, fueling economic growth and development. In Kenya, the small business sector makes up 98% of the economy, employing 80% of the workforce and contributing nearly 30% to the GDP.
However, many SMEs cannot thrive and expand without accessing the global financial system. In fact, 80% of businesses in Africa fail within five years, according to a 2022 Nigeria MSME report by Kippa. “Harsh economic environments, lack of access to capital, and poor business practices have stunted the growth and transition of micro-businesses,” the report reads.
The quick access to the United States dollar-based global financial system would open many doors, but opening a USD or euro account is challenging for businesses in Africa, South Asia, Latin America and other emerging economies.
How blockchain and stablecoins can change the game for SMEs
Blockchain technology has been around for more than a decade, and it has already proved its ability to transform businesses in any industry. One of the most critical blockchain-based innovations is stablecoins, digital tokens pegged to fiat currencies, such as the U.S. dollar.