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2022-05-05

Cedric

Cedric G.

How crypto can benefit SMEs in Africa

Small and Medium Enterprises (SMEs) are fast-growing in Africa. According to a World Bank report, SMEs account for about 90% of businesses and more than 50% of employment worldwide. As such, they are regarded as the driving force of Africa’s development.

In reality, with the exponential growth in population, the public sector in African countries cannot meet the daily needs of every citizen. SMEs in a bid to complement the lapses of the public sector face lots of challenges which range from management to finance. This article will propose five ways cryptocurrencies can benefit SMEs in Africa.

Decentralised and reduced financial transaction costs

Cryptocurrencies are favourable for SMEs due to their decentralised nature which permits their users to manage their finances without any major restrictions.

The traditional finance system which is most often constraining and time-consuming reduces the chances of entrepreneurs to fully integrate into the business world. 

For instance, for an entrepreneur to get a loan from a bank, they must have a bank account for which the bank charges them a yearly fee for maintenance. Moreover, the loans provided are often gotten at exorbitant interests rates. Such conditions are disadvantageous for SMEs.

Decentralised finance serves as a tool of financial inclusion for both banked and unbanked citizens and permits them to have access to financial resources at reduced costs. 

Multiple means of payment

SMEs may have a local setting but can use cryptocurrencies to boost the growth of their business. Therefore, integrating multiple payment methods gives your business international weight in its early days, thereby attracting several clients. 

Accepting payment through bitcoin is an added advantage for SMEs in Africa considering the market potential of the continent in the crypto space.  

Receiving payments in bitcoin may leave you wondering how to use this digital currency. The good news is, with Yellow Card, you can sell your bitcoin and withdraw the equivalent throw your mobile money account.

Cheap cross-border transactions

Unlike traditional banks which charge fees on all transactions, the costs with cryptocurrencies transactions are much cheaper. 

Moreover, the cost of international transactions associated with banks is even much higher. As such, SMEs with international partners often incur lots of losses whenever they engage in financial transactions. However, relying on crypto transactions through platforms like Yellow Pay solves this problem.

Yellow Pay offers quick, reliable, and secure payment across national borders without restrictions on authorization formalities related to amounts to be transferred. This could e significantly beneficial to all   SMEs in Africa.

Safer and more secure means of exchange

Bitcoin is a digital currency and obviously, it is more difficult for anyone to easily steal your funds due to the encrypted nature of the coins. It is true that hackers can invade your personal information and steal your crypto but it is more complicated than it seems because that requires your private key.

To avoid being hacked, it is preferable to use a trusted crypto exchange service that has more secure platforms compared to peer-to-peer transactions.

Preparing for the Future

With prospects of cryptocurrencies replacing the traditional financial system, it is necessary to prepare to face the alleged change. 

Even though this may not sound practical, accepting cryptocurrency adds more value and impact to your business and prepares you for the future with new financial trends. 

Between 2009 and now, most skeptics in crypto are gradually being converted because of the considerable growth registered in this domain.

As bitcoin continues to gain fame and register more users, its value continues increasing and its users are better placed to quickly adapt to shifting consumer preferences. 

In conclusion…

As an entrepreneur, the time to start using cryptocurrencies to boost your business is now. Though cryptocurrencies are highly volatile in nature, the impact they could have on an SME is worth considering. Start using crypto and have full control over your finances.

Get started with crypto