"Supply chain finance" is developing rapidly due to its "can effectively solve the financing problems of SMEs, but also to extend the bank's vertical
depth of service" win-win results.
 

 

Supply chain finance provides solutions to the concept and technical bottlenecks of SME financing, and the SME credit market is no longer unattainable.
 
Supply chain finance has begun to enter the attention of many large
corporate finance executives. For them, supply chain finance as a
new channel of financing, not only helps to make up for the traditional working capital line of credit compressed bank, and up and down
travel company to introduce financing facility, its liquidity level of demand continues to decline.
 

 

 

Bank open sourceNew pathway

 

Supply chain finance provides a new channel for entering and stabilizing high-end customers. Through a
package of solutions for members of the supply chain system , core enterprises are "bound" with banks that provide services.
 
The main reasons why supply chain finance is so attractive to international banks are:
 
Supply chain finance is more profitable than traditional businesses, and it provides more valuable opportunities to strengthen customer relationships.
In the context of the financial crisis, the above reasons seem to be more adequate. The potential market for supply chain finance is huge. According to UPS
estimates, the stock of accounts receivable in the global market is approximately US$1.3 trillion, and
the market potential of discounted accounts payable and asset-backed loans (including inventory financing) reach 100 billion. US dollars and 340 billion US dollars.
 
As of 2008, 46 of the world's 50 largest banks provide supply chain financing services to enterprises, and the remaining
4 are also actively planning to start this business.
 

 

"Through supply chain finance, banks not only deal with a single enterprise, but also deal with the entire supply chain. The information they have is
relatively complete and timely, and the bank's credit risk is much less."
 
People from China Merchants Bank said that under the service and risk consideration model of supply chain finance, because banks pay more attention to the
trade risks of the entire supply chain , the assessment of overall trade transactions will include more SMEs in the bank's service scope. Even if a single company
fails to meet certain risk control standards of the bank, as long as the business relationship between the company and the core company is stable, the bank can
not only conduct an independent risk assessment of the company’s financial status, but also conduct an independent risk assessment of the business. Grant credit and facilitate the realization of the entire transaction.
 

 

 

Economic benefitAnd significant social benefits

 

Equally important, the economic and social benefits of supply chain finance are very prominent. With the help of the "group buying" development model and
the innovation of risk control methods, the benefit-cost ratio of SME financing has been improved, and it has demonstrated obvious economies of scale. .
 
According to statistics, through the improvement of payment collection methods, inventory revitalization and deferred payment with supply chain financial solutions, the largest
1,000 companies in the United States reduced their liquidity requirements by US$72 billion in 2005.
 
Similarly, in 2007, Europe's largest listed companies in 1000 from accounts receivable, accounts payable and inventory and other three accounts disc
live 46 billion euros of funding.
 

 

supply chain financeRealize multi-stream integration

Supply chain finance has well realized the integration of "logistics", "business flow", "fund flow" and "information flow".