How Onchain Capital Can Reach Europe’s Underserved SMEs

Novel models for RWA tokenization could allow SMEs to receive credit using tangible assets as collateral. A new Cointelegraph Research report presents a case study.

After the 2008 Great Financial Crisis, regulations forced European banks to hold more capital against riskier loans. As a result, SME loans became less attractive because they carried similar underwriting and monitoring costs as larger loans but generated lower absolute returns. Private credit firms filled some of the gap but exposed borrowers to floating rates that became unbearable when rates spiked. Now, European SMEs face a €39 billion annual funding gap. 

Cointelegraph Research's new report identifies a structured-access hybrid model within RWA private credit that could help close the funding gap with onchain capital. One platform using this approach has already originated 15.4 million USDC across 2,143 investors.

Read the full Cointelegraph Research report here

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