Abstract
Purpose - The purpose of this research is to analyse how the blockchain technology can be used for the trade finance processes in Nigeria. The blockchain stands to be a disrupter of current business processes with the potential to eliminate third parties like the banks, however, its’ application in business transactions is shrouded in ambiguity. This study aims to demystify the blockchain technology through the lens of the trade finance process in Nigeria.
Literature review – This review is centred on three main topics which is: (1) The blockchain technology, covering the key features, how it works, the applications and benefits, general misconceptions and barriers to the adoption. (2) Trade financing which covered the common trade finance processes and the different trade products (3) Nigeria in blockchain and trade finance which looked at Nigeria at a glance, trade financing statistics in Nigeria and the Nigeria’s pulse for the blockchain technology. The review was concluded with the recent milestones the blockchain technology has made in different sectors across the globe.
Methodology- A qualitative approach is used based on semi-structured in-depth interviews from subject matter experts in the blockchain and trade finance process. A critical case sampling in a purposive sampling technique was used to target the sample population, and data collected from these population, in addition to secondary data collected, is used to understand and build the theory for the research.
Findings - The blockchain technology in the trade finance process is about the digitisation and automation of the current process thereby reducing turnaround time from about 7 – 14 days to just 24 hours or near real-time, thus making faster settlements. This digitisation takes away the paper process of dispute resolution, contract agreement, document presentation, confirmations, verifications, approvals and the tracking and tracing of shipments.
Recommendations – Further research is needed to understand the blockchain in other business processes to facilitate its global adoption, and also, to see if the blockchain can itself be disrupted by other digitisation technologies in the future.
