New digital platform to help SMEs with financing

"This is an exceptional European project, which will be managed by us from the Czech Republic. EBSI will allow companies to issue bonds and raise capital for their further development. At the same time, it will reduce the cost of issuing bonds, which will help bring new opportunities, make securities trading more transparent and simplify oversight by regulators. The digital platform will also allow investors to easily search for bond offerings from different companies. Based on this, they will decide which one to invest in," said Minister of Industry and Trade Jozef Síkela.

The platform will use blockchain technology so that all transactions, such as buying and selling bonds, will be recorded in a public and immutable digital form. This will help increase investor confidence as they will be assured that all information is transparent. It is also an easier way for investors to connect with the company they choose to invest in.

"We have been trying to build this platform for several years and have received support from a number of EU Member States and the European Commission. It is even part of the European and our national strategy for supporting SMEs. We are therefore glad that it is starting to be implemented and that, especially with the involvement of Czech universities, a technological backbone in the field of DLT, i.e. innovation, will be created here in Slovakia, where we are already very strong," says Petr Očko, Chief Director of Digitisation and Innovation.

SMEs often find it difficult to obtain bank loans to finance their projects, which is why the MIT launched a call from NPOs last year to create a digital EBSI platform. Applications could be submitted until 26 February 2024 with a total allocation of CZK 195 million. The funds cover non-investment items such as salary costs of IT experts, lawyers and economists. The main beneficiary of the project is the CTU, which is preparing the EBSI platform in cooperation with the Charles University Law School, the University of Economics in Prague, the Brno University of Technology and the Technical University in Bratislava. "We are proud that CTU can join the project and create an innovative platform for supporting SMEs in cooperation with other universities." says Vojtěch Petráček, Rector of CTU.

The consortium also includes 10 partners from the Czech Republic and Slovakia, Poland, Spain, Greece and Bulgaria. The first task and condition of the National Recovery Plan was to check the interest of SMEs that would like to participate in the testing. The aim was to recruit at least 190 such companies.

"There is a great interest from companies in various EU countries to join the project, as it will help to solve financing problems, especially for small and medium-sized enterprises, for which access to finance has become much more difficult in recent years. We have met the project's objective, and at the moment we have over 210 companies interested in testing the platform and subsequently issuing digital bonds using the platform," says the project's principal researcher Jan Škrabka, who is responsible for law, finance and technology at the CTU.

By involving a sufficient number of SMEs, the project is moving to the next phase. Now the platform itself is being created, where the bond issue will be prepared in several steps and then purchased by the investor. "After pilot testing, we want to launch the full operation of the platform by the end of 2025," adds Škrabka, the project's principal researcher.

The EBSI project started to develop in 2018, when the EU countries, Norway and Liechtenstein formed the European Blockchain Partnership within the European Commission. It is the first blockchain infrastructure for the public sector in Europe. The aim was to use blockchain to create cross-border services for public administrations, businesses, citizens and their ecosystems, to deliver trusted services. In addition, the Covid crisis showed the need to support SMEs.

Original text: Mnistry of Industry and Commerce

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