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The Bank for International Settlements (BIS) Innovation Hub announced the development of a prototype developed as part of Project Dynamo that explored how institutional investors can be encouraged to finance small and medium-sized enterprises (SMEs) through the programmability and transferability of digital trade tokens on a public blockchain. The prototype makes use of non-fungible tokens and smart contracts for SME finance. https://www.bis.org/about/bisih/topics/open_finance/dynamo.htm

This paper builds on the Bank of England's response to the Future of Finance Report, where the Bank proposed an Open Data Platform to boost access to finance for SMEs. The Open data for SME finance paper explains the proposal in more detail, and provides an update on what we have learnt from our research and industry engagement to date.

The Australian government's SME Guarantee Scheme welcomed fintech firms Moula and Prospa participants in the Scheme. Under the Scheme, the government will guarantee 50% of new loans issued by Prospa and Moula to SMEs.

In the UAE, Dubai SME has allocated AED20 million "for the capital guarantee scheme launched by its financial arm, The Mohammed Bin Rashid Fund (The Fund), in partnership with Beehive, the first regulated peer-to-peer (P2P) lending platform in the Middle East & North Africa (MENA) region."

The Hong Kong Monetary Authority (HKMA) is exploring the use of the Commercial Data Interchange (CDI) to enable more efficient financial intermediation in the banking system, and to enhance financial inclusion in Hong Kong. The CDI is a consent-based financial infrastructure that would enable more secure and efficient data flow between banks and sources of commercial data. It has the potential of solving long-standing pain points in SME financing by allowing SMEs to use their own data to enhance their access to financial services. To study the technical feasibility of the CDI, the HKMA is conducting a Proof-of-Concept (PoC) study in collaboration with banks. The PoC focuses on using trade-related data to facilitate trade finance application process and is expected to be completed by the end of 2020.

UK-based Qardus has launched a Shariah-compliant P2P SME lending platform, offering unsecured loans of up to £100,000 in the form of a "murabahah," which is a commodity and a type of Islamic financing structure through which buyers and sellers both agree to the cost and mark-up of a particular asset. Qardus charges borrowers a 2 to 5% fee, and borrowers are required to have been operating a business for three years or more, and they must have a turnover or assets worth £100,000. Also, borrowers must operate in "recession-proof" industries including food and beverages, food manufacturing and pharmaceuticals.

Ant Group has unveiled Trusple, a blockchain based-platform powered by AntChain to help Small to Medium Enterprises (SMEs) with cross-border trade. Trusple works by generating a smart contract once a buyer and a seller upload a trading order on the platform. As the order is executed, the smart contract is automatically updated with key information, such as order placements, logistics, and tax refund options. Using AntChain, the buyer's and seller's banks will automatically process the payment settlements through the smart contract.

The Hong Kong Monetary Authority issued virtual banking rights to 4 more companies: Ant SME Services (Hong Kong) , Infinium, Insight Fintech HK, and Ping An OneConnect.

The BIS Innovation Hub's Hong Kong Centre and the Hong Kong Monetary Authority have launched Project Dynamo, which aims to deliver a prototype for the compliant use of decentralised finance (DeFi) tools, such as blockchain and smart contracts, to improve access to finance for unfunded and underfunded small and medium enterprises (SMEs). The research will extend into related topics such as decentralised identifiers and the interoperability of digital payment methods such as stablecoins and central bank digital currencies.

Polish-British fintech firm Billon has sealed an almost €2 million grant from the European Commission's SME Instrument program to develop a blockchain document management system.

NatWest has announced that it is waiving monthly hire fees for Point-of-Sale terminals from its payments product Tyl until the end of 2020, adding to the range of support that the bank has launched for its SME customers during the current crisis, allowing businesses to offer a variety of payment options at a reduced cost.

"SWIFT will enable instant and frictionless payments from account-to-account anywhere in the world, with an end-to-end solution that combines international and domestic capabilities. This ambitious platform expansion means SWIFT will support financial institutions to strengthen their positions in B2B payments and capture new volume in SME and consumer segments."

Ant Financial is opening up its proprietary blockchain platform to small businesses and developers to help in the creation of multi-user trust-based digital applications. Ant Financial's OpenChain provides developers with dozens of readily available modules and smart contracts that can be used in various combinations to build trust in multi-party collaborations, including in areas such as supply chain finance, product provenance, digital invoices and charitable donations.

"Due to the COVID-19 induced economic crisis, small and medium-sized businesses, as well as buyers, will benefit from the spread of digital payment systems based on QR codes. It is in these groups that the main costs of the cashless world are now born. Large retail chains always have lower commission costs than smaller stores around the corner. Buying terminals for a small business is also a greater financial burden than for huge corporations. Regarding the effect of COVID-19 crisis on SMEs, QR codes are able to solve all current issues at once. If we analyze the potential through the prism of B2B, then payments can be digitized, simplified, streamlined and secured. In addition, QR codes give unbanked people access to digital non-cash payments, increasing the inclusivity of the financial industry. It's not just for the inhabitants of countries with developing economies, either, with the Financial Conduct Authority estimating that there are 1.3m people without a bank account in the UK alone, with those numbers concentrated in big cities."

Launched in mid-2018, we.trade is ahead of rivals like Marco Polo, a trade finance blockchain backed by TradeIX and R3 that's still in the pilot stage. The we.trade platform is now all about commercial adoption and it's taking a two-pronged approach: attract more banks and onboard more SMEs.

The Next Capital markets Union High-Level Group brings together European personalities recognized for their expertise in capital markets, digitalization and/or financial innovation and reflects the viewpoint of the real economy including SMEs, investors, financial intermediaries and market infrastructures. The members have been appointed by the Ministers of Finance.

The CEO of NZIA, the tech firm behind the Central Bank of the Bahamas Project Sand Dollar, has said the key to making it a reality is by engaging with local banks, SMEs and entrepreneurs to create new products and solutions around the new digital currency.

Business-to-business (B2B) fintechs, particularly those that support rapidly growing ecommerce, have performed well on the whole, and have been popular among investors. But for the big consumer fintech names, it has been rather different story. Some, such as Monzo, have seen valuations plummet. Both Monzo and Revolut have faced a barrage of complaints from customers who have had their accounts frozen. Challenger banks serving SMEs have also not had a great pandemic. And finally, the VC money that has so far kept them afloat is not as readily available in a global downturn.

To develop the related technology for alternative credit scoring, the HKMA has commissioned the Hong Kong Applied Science and Technology Research Institute (ASTRI) to study the use of artificial intelligence in SME loan applications; and published a white paper to deliver the findings.

Small and medium-sized enterprises (SMEs) dominate the business landscape in the Middle East and North Africa region, yet they face impediments to growth, being handicapped by limited access to credit, unfavorable business environments, and talent gaps. Digital technologies present new opportunities for these businesses to achieve faster growth. To increase demand for digital services, governments should develop digital literacy and awareness programs as well as foster consumer trust by strengthening frameworks for cybersecurity, digital identification, data privacy, and consumer protection. The digital strategy must be underpinned by financial sector and business environment reforms, particularly strengthening financial infrastructures and business support.