Qatar Ministry of Communications and Hamad Bin Khalifa University praise Blockchain for SMEs

Qatar Ministry of Communications and Hamad Bin Khalifa University praise Blockchain for SMEs

The Qatar Ministry of Transport & Communications (MoTC) and Hamad Bin Khalifa University (HBKU) organized a virtual forum entitled ‘Digitization of SMEs: An Alternative To Survive' which focused on SMEs in Qatar and the opportunities to expand their knowledge by using emerging and latest technology into their digital transformation journey. The discussion brought up how fintech and Blockchain are game changes for SMEs. 

Dr. Roberto Di Pietro, Professor, CSE, HBKU said, 'Fintech and Blockchain are game changers for SMEs as they offer many benefits for SMEs like trust, speed, security, protection against identity fraud. Blockchain solves the cash flow problem, the paperwork issue as digital work is much easier. It also helps SMEs go global as blockchain knows no boundaries and the companies can deliver services in time knowing that funds will always be available. In addition international payments become easier and cheaper. Being a digitalized process, it is more cost-efficient as Blockchain applications will streamline business processes and offer great potential for reducing costs and complexity of processes.

He noted, that according to a recent survey, the Global Fintech Market was valued $5,504.13bn in 2019 and by the year 2025 is expected to grow by 25 percent per year which is a huge growth because it can increase, automate the delivery, and use financial services. 

He said, SMEs are backbone of national economy and play a crucial role in the economic and social development. The challenges for SMEs are multi-dimensional like embracing technology, attracting new customers, securing finance, increasing revenue and processing payments. 

'Trade financing is one of the key elements of Blockchain technology for SMEs. The Asian Development Bank forecasts the global trade finance gap currently stands at $1.5 trillion or 10 percent of merchandise trade volume and is set to grow to $2.4 trillion by 2025. But the results from the new study show the gap could be reduced by $1 trillion using blockchain technology efficiently. 

Dr. Mohamed Abdallah, Associate Professor, CSE, HBKU gave an overview on Blockchain and its applications for SMEs. He said, 'For Blockchain technology there is high interest as many companies and startups in Qatar like QPay are using it. Even work is going on in developing strategies, blueprints to adopt it in Qatar. 

'Blockchain started due to the global financial, economic crisis in 2008. The main source for this problem was the centralized ledger posted by the banks, all the transactions and movement of the money of the users was handled by centralized ledger. There was no transparency about how this money was used. This centralized ledger was single point of failure. So the issue was moving from centralized ledger to distributed ledger, he added.

He also shed light on the benefits of Blockchain for SMEs. Firstly, secured, fast and cheap cross border payments enable SMEs to perform secure transactions without any intermediary's involvement. Secondly, cheap, and secure cloud data storage allows SMEs to scale indefinitely, while ensuring trust and safety at the same time. Thirdly, Smart Contract allows SMEs to automate and speed up the traditional process by eliminating all the intermediaries. And lastly, SMEs employing Blockchain can gain trust of their customers and expand their businesses. 

Dr. Noureddine Lasla, Research Fellow, ICT Division, CSE, HBKU presented a demo of how to develop a decentralized application on Blockchain design for deployment for SMEs. 

He said, 'The traditional web or mobile application relies on centralized server to manage the business, for example Gmail, twitter, Facebook are hosted on centralized or single server. This kind of architecture has some security drawbacks like privacy concerns, on the other hand Blockchain architecture is completely different instead of having single server to host all the business application there is distributed set of servers that are connected and communicate with each other in secure manner using Blockchain protocol.

'Now a days there are plenty of decentralized applications that use this concept like application for distributed cloud storage, distributed computing platform etc, he added.

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