01
Introduction
01
Introduction
This report, commissioned by the European Bank for Reconstruction and Development (EBRD) and Block, inc. (Block), explores the role that innovative technologies can play in supporting MSMEs in displaced populations. It builds on the role that these solutions have played in the context of the Ukrainian conflict, illustrating how they could be used more broadly to support displaced MSMEs across other geographies, in particular emerging markets, in current and future crises. To this end the report includes potential next steps for action to increase the use and adoption of these technologies.
MSMEs constitute the foundation of the global economy, but particularly so in EMDEs. In these regions,9 they are responsible for generating 4 out of 5 new job positions created,10 while contributing around 40% of GDP, making them a major driver of economic growth and prosperity. There is not, however, a single, globally agreed definition for a MSME, which ranges from sole proprietors to 10 employees per the EU’s definition. 11 12
Finding ways to connect displaced MSMEs with blockchain-based financial services will not only help protect livelihoods but can also provide a solid foundation for economic recovery, growth, and development including as and when it is safe for entrepreneurs to return to their homelands.
The combination of the EBRD's expertise in working with the private sector, governments, international organisations, and Block's technical expertise on innovative payment services provides an example of how a public-private collaboration can help drive progress in this space.
This report is structured as follows:
First, it sets out the challenges faced by MSMEs in displaced communities, including an overview of why existing solutions still often fail to support those most in need.
It then recaps the range of established mobile and digital financial services globally, before highlighting some of the more recent innovative solutions including digital assets (Bitcoin and stablecoins) and blockchain infrastructure, and how these have been used by Ukrainian citizens and MSMEs following the Russian invasion.
It includes case studies illustrating additional, specific solutions with utility in crisis situations where access to the mainstream financial infrastructure is limited.
Concludes with an assessment of the key challenges to the deployment of such solutions at scale, alongside next steps and potential pilot projects.
This report, commissioned by the European Bank for Reconstruction and Development (EBRD) and Block, inc. (Block), explores the role that innovative technologies can play in supporting MSMEs in displaced populations. It builds on the role that these solutions have played in the context of the Ukrainian conflict, illustrating how they could be used more broadly to support displaced MSMEs across other geographies, in particular emerging markets, in current and future crises. To this end the report includes potential next steps for action to increase the use and adoption of these technologies.
MSMEs constitute the foundation of the global economy, but particularly so in EMDEs. In these regions,9 they are responsible for generating 4 out of 5 new job positions created,10 while contributing around 40% of GDP, making them a major driver of economic growth and prosperity. There is not, however, a single, globally agreed definition for a MSME, which ranges from sole proprietors to 10 employees per the EU’s definition. 11 12
Finding ways to connect displaced MSMEs with blockchain-based financial services will not only help protect livelihoods but can also provide a solid foundation for economic recovery, growth, and development including as and when it is safe for entrepreneurs to return to their homelands.
The combination of the EBRD's expertise in working with the private sector, governments, international organisations, and Block's technical expertise on innovative payment services provides an example of how a public-private collaboration can help drive progress in this space.
This report is structured as follows:
First, it sets out the challenges faced by MSMEs in displaced communities, including an overview of why existing solutions still often fail to support those most in need.
It then recaps the range of established mobile and digital financial services globally, before highlighting some of the more recent innovative solutions including digital assets (Bitcoin and stablecoins) and blockchain infrastructure, and how these have been used by Ukrainian citizens and MSMEs following the Russian invasion.
It includes case studies illustrating additional, specific solutions with utility in crisis situations where access to the mainstream financial infrastructure is limited.
Concludes with an assessment of the key challenges to the deployment of such solutions at scale, alongside next steps and potential pilot projects.