Yesterday Noor Bank unveiled a new report that outlines the potential of blockchain to transform trade finance in the UAE. The report considers the possibility of faster shipping and settlement and reduction in transaction costs. The whitepaper is entitled: ‘The Evolving Landscape of Trade Finance in the United Arab Emirates’.
At the Noor Business Council event, a panel discussed some of the issues. Rafi Yachoua, Senior Strategist at Xisché & Co, highlighted that 7% of corporate trade finance applications get rejected. In comparison, the rate for SME’s is 50%. The challenge for banks funding SME’s is the collection of data, what kind of data to consider, and how to assess the risk. He believes transparency can be accomplished using technologies such as blockchain.
Yachoua said: “The problem of knowing the state of SME’s. What’s is their financial standing, what kind of trade they’ve done in the past. To allow banks, allow financial institutions, to go ahead and assess them accurately for the objective of what? Bringing down this 50% rejection rate to a much lower number.”
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