UnionBank on MSMEs, Rural Banks, and the Blockchain

For UnionBank, the blockchain effectively cuts the middleman and connects the rural bank to the entire banking system more efficiently.

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UnionBank, the country’s first bank to embrace the blockchain is giving more opportunities to medium, small, and micro enterprises (MSME) in terms of lending. With the bank’s major shift to digital, it is also trying to extend its reach to the unbanked.

UnionBank and MSMEs

UnionBank is targeting to increase its portfolio mix of MSMEs from 15% to 30%. Mr. Justo Ortiz, UnionBank chairman, is excited about the move. He said MSMEs “is an exciting sector with huge potential. And most are still underserved if not unserved,”.

UnionBank plans to connect 5,000 MSMEs using a platform that it will launch in April 2018.

“With the platform, MSMEs can sell, pay and be linked to other fintechs offering digital services” – Mr. Justo Ortiz, Chairman, UnionBank

UnionBank and Rural Banks

Mr. Ortiz also shared why they want to connect the rural bank into the blockchain. In a statement, he mentioned that while these banks are already catering to the unbanked, they themselves are cut off from the system. Through the blockchain, it will eliminate the need for the rural bank to negotiate with the middleman to deal with the bigger banks.

“The growth rates of places outside advanced areas have been encouraging. But a trust factor is needed. How do we got these businesses work with each other? Enter Blockchain,” – Mr. Justo Ortiz, Chairman, UnionBank

UnionBank and Blockchain

UnionBank announced its partnership with Visa in trying a new system that can facilitate cross-border payments in the blockchain, the Visa B2B Connect.

Source: Malaya

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