[SCF] 6 main actors in the supply chain finance ecosystem

Supply chain finance is an eco-collaborative financial business, i.e., to complete a supply chain finance business, it requires the collaboration of three roles, including the platform provider, the risk manager, and the liquidity provider: the platform provider integrates the subjects, objects, and information related to the upstream and downstream transactions of the supply chain through the output of the service, and plays the role of acquiring customers, management and information collection; the risk manager is responsible for the design of the supply chain finance program, risk identification and risk control; the liquidity provider is responsible for providing funds. The platform provider integrates subjects, objects and information related to upstream and downstream supply chain transactions through the output of services, and plays the roles of customer acquisition, management and information collection; the risk manager is responsible for the design of supply chain financial programs, risk identification and risk control; and the liquidity provider is responsible for providing funds.

Therefore, in the supply chain finance business, each supply chain finance stakeholder/participating body constitutes the supply chain finance ecology. The supply chain finance ecosystem consists of six categories of subjects:

supply chain finance demand side;

core enterprises in the supply chain;

supply chain finance platform;

supply chain finance technology enabler;

supply chain finance platform;

supply chain finance ecosystem includes six categories of subjects. Supply Chain Finance Technology Enabler;

Supply Chain Finance Capitalizer;

Supply Chain Finance Infrastructure.

Figure 1-1 China Supply Chain Finance Ecosystem Diagram

01

Demand Side of Supply Chain Finance

Micro, small and medium-sized enterprises (MSMEs) find it difficult to obtain financing through traditional means due to their disadvantaged position in the supply chain, the serious occupation of funds, and the lack of effective and low-cost credit assessment and credit enhancement means. The SMEs have been unable to obtain financing through traditional means. However, when financial institutions measure the financing risk of MSMEs from the perspective of the supply chain as a whole, they can gain a deeper understanding of the operating status and creditworthiness of MSMEs, which is more conducive to MSMEs' access to financial support.

02

Core enterprises in the supply chain

Core enterprises in the supply chain refer to the leading/backbone enterprises of the industry, and the function of most of the core enterprises in the supply chain financial ecosystem is to provide credit guarantees for their upstream and downstream MSMEs. However, it should be noted that some leading/backbone enterprises in the industry will transform into service-oriented enterprises and establish productive service platforms/institutions to enhance the overall competitiveness of the supply chain, promote the upgrading of the whole industry, and play the role of supply chain finance platform; some leading/backbone enterprises in the industry will even set up financial science and technology companies to export their risk-control capabilities to the outside world; and some leading/backbone enterprises in the industry will delve deeper into the financial end and establish financial subsidiaries to play the role of supply chain finance. The company has set up financial subsidiaries to play the role of supply chain finance funders.

03

Supply chain finance platform

Specifically, these include supply chain management service companies, logistics companies and B2B platforms. These subjects provide business scenarios for supply chain finance by building platforms or ecosystems for supply chain operations, and help funders in the scenarios to achieve customer acquisition and wind control: on the one hand, they use their ability to integrate industrial resources and optimize the supply chain to excavate and recommend financing customers for supply chain finance funders; on the other hand, they rely on their own accumulated industry experience or their control of logistics, business flow, and information flow in the supply chain, On the other hand, by virtue of its accumulated industry experience, or by controlling the logistics, business flow, information flow and capital flow in the supply chain, or by utilizing blockchain, big data + artificial intelligence, Internet of Things and other technological means, it can help supply chain finance funders carry out risk prevention and control.

(1) Supply Chain Management Service Company

Supply Chain Management Service Company, based on the integration of resources, designs, plans, and optimizes the logistics, information flow, capital flow, and business flow of the supply chain, and then provides integrated services such as order management, procurement execution, customs clearance and tax rebate, logistics management, capital financing, information management, trade commerce, and settlement.

Supply chain companies are directly involved in trade, but they are not trading companies; they are involved in logistics, but they are not logistics companies; they help small and medium-sized growing enterprises to solve the problem of difficult financing and expensive financing, but they are not banks; and they provide the support of information technology and intelligent technology, but they are not technology companies.

What supply chain companies are best at is resource integration and configuration, meeting customers' non-core business outsourcing needs, realizing efficient supply chain operations through business model design, and creating value for customers.

(2) Logistics companies

Logistics companies from the professional logistics services into either the formation of financial warehousing professional services capabilities to help fund the goods pledge financing business pledge supervision; or from the expansion of logistics to the flow of commerce, information flow, capital flow to form a four-flow integrated supply chain management service capabilities, but its logistics, information flow, capital flow and the development of the supply chain management services. The supply chain management service ability, but its logistics business is still the main business, and relative to the first type of supply chain management service company more "heavy assets".

(3) B2B platform

B2B platform to the Internet / mobile Internet as a carrier, through the standardization, online, data, intelligent way, widely connected to the suppliers, buyers, and productive service providers, to achieve online transactions, collaboration, and even settlement.

Online

Offline will be matched with efficient supply chain operation system according to the demand, and the offline efficient delivery will be matched with the online efficient transaction and collaboration.

Finally, with big data intelligent analysis, capital account management, and logistics supervision as the main risk control tools, supply chain financial services are embedded in the transaction scenarios.

04

Supply chain financial technology enabler

The financial technology operation platform refers to the platform that utilizes financial technology to conduct financial risk control operations, which focuses on the construction of financial risk control capabilities, and with the help of big data, artificial intelligence, Internet of Things, blockchain and other technological means. With the help of big data, artificial intelligence, blockchain and other technological means, the platform focuses on the construction of financial risk control capabilities, and with the role of an independent third-party risk manager, it helps funders to realize the identification, control and management of financial risks; and charges a fee for risk control services as the main means of profitability.

Big data + AI technology is mainly used for intelligent analysis of supply chain finance-related data to assist in risk control; IoT empowers the operation of logistics and the visual and controllable supervision of objects; blockchain technology mainly guarantees the anonymity, openness, non-tampering, traceability of information and automatic execution of contracts.

05

Supply Chain Finance Funders

Supply Chain Finance Funders refer to licensed financial institutions, including banks, factoring, microfinance, funds, guarantees, trusts, securities, insurance, etc.. They are liquidity providers. At the same time, some financial institutions, in addition to providing funds, also serve as risk managers or platform providers, compared with financial institutions as pure capital providers, such institutions have deeper involvement in the industrial supply chain and a higher degree of control.

Specifically, some banks provide supply chain financial services for small and medium-sized enterprises (SMEs) in the real industry based on the advantages of capital cost and the ability to control the capital account, and new modes such as transaction banks (building their own platforms or cooperating with the platforms to master the transactions) and financial technology banks (forming new wind control capabilities based on financial technology); some non-bank financial institutions also provide supply chain financial services by building service platforms or research and development of the application of financial technology. Some non-bank financial institutions have also developed supply chain finance business in depth by building service platforms or developing applications of financial technology.

06

Supply Chain Finance Infrastructure

Infrastructure provides infrastructure, tools and services for supply chain finance business, including all kinds of information technology infrastructure providers (including information management system providers and financial technology providers), electronic and authentication technology providers, standard warehouse receipt providers and other service providers. certification technology service providers, standard warehouse receipt service providers, e-signature and e-contract service providers, data service providers, credit service providers, payment service providers, fund management service providers, financial asset exchanges, law firms, accounting firms, and industry intermediary organizations.

Source | Wanlian Supply Chain Finance Think Tank