Main characteristics of supply chain finance

Main characteristics of supply chain finance

Supply chain finance must be based on the real trade background, and its remarkable characteristics are closure and self-compensation, that is, the production, logistics and financial support of enterprises form a closed industrial chain model. Supply chain finance is self-compensation trade financing, that is, repayment comes from compensation, closed operation, post-loan operation as the core of risk control, and the characteristics of credit use are obvious.

1. Core enterprises and supply chain members maintain a relatively stable cooperative relationship.

Supply chain finance focuses on the development and trade situation of the whole supply chain enterprises. Through the participation of core enterprises, small and medium-sized enterprises can obtain low-cost financing and realize the stable development of supply chain financial business and the sustainable development of chain enterprises. Transaction information in the supply chain can make up for the problem of insufficient information and high cost of information collection in small and medium-sized enterprises. Core enterprises have strict management of supply chain members, and after entering the supply chain, the two sides will maintain a relatively stable cooperative relationship.

2. The main difference between supply chain finance and traditional finance is that the credit subject has changed from "n" to "1".

The difference between supply chain finance and traditional finance is mainly reflected in the credit difference. The credit account has changed from the original "n" to the current "1". Under the traditional financial model, obtaining bank financing through the class guarantee of core enterprises is essentially based on credit difference. The main body of bank credit includes both core enterprises and small and medium-sized enterprises, that is, the overall credit to N enterprises. Under the new mode of supply chain finance, investors only give credit to core enterprises, and core enterprises give credit to middle and lower reaches enterprises based on physical transactions, and the capital risk exposure is transferred from banks to core enterprises. As the main body taking risks, core enterprises will also get corresponding risk premium income; In addition, based on its own information advantages to the industry and upstream and downstream enterprises, it will further gain the benefits of improving the risk pricing ability and realize the optimal allocation of the overall resources of the industry.

3. The living space of supply chain finance is poor credit, poor cognition, poor mode and poor ecology.

The credit gap between core enterprises and SMEs is the source of supply chain finance. Core enterprises have a large scale of operation and occupy a core position in the industrial chain. High credit has a natural advantage in obtaining funds. Based on a deeper understanding of the industry and upstream and downstream enterprises, core enterprises have more advantages in risk control. The foundation of core enterprises lies in their natural risk identification ability, so as to obtain excess risk premium. Based on their own business control ability, warehousing ability and internet platform, core enterprises have more advantages than traditional financial institutions in the financing mode with accounts receivable pledge and goods right pledge as the core. In the mature stage of development, supply chain finance will establish an ecosystem with core enterprises in multiple dimensions such as products, logistics, warehousing and financing. The penetration of the Internet from consumption to industry and from individuals to enterprises has accelerated the formation of supply chain finance ecosystem. Supply chain finance is more sticky to upstream and downstream enterprises at the product business end, and has a more industrial foundation at the product consumption end than online and offline.

4. The successful factors of supply chain finance are large industry, weak upstream and downstream, strong control, low cost, high leverage and standardization.

The industrial characteristics suitable for supply chain finance are large industry, weak upstream and downstream, strong control, low cost, high leverage and standardization. Big industry means big industrial space; Weak upstream and downstream means that at least one of the customers is weak and cannot obtain cheap funds from the bank; Strong control means having real transaction data and credit information online, backed by logistics and warehousing offline, so as to control risks; Low cost means low capital cost, which makes supply chain finance profitable without excessively increasing the burden of financiers. High leverage means that a certain amount of principal investment can incite a large number of assets; Standardization refers to the relative standardization of collateral used for financing.

Extended data:

Development of supply chain finance

With the deepening of socialized production mode, the market competition has changed from the competition between single customers to the competition between supply chains, and all parties in the same supply chain are interdependent, "all glory, all loss"; At the same time, because credit sales have become the mainstream transaction mode, it is difficult for suppliers in the upstream and downstream of the supply chain to obtain financial support from banks through "traditional" credit sales, and the shortage of funds will directly lead to the stagnation or even "chain breakage" of the follow-up links. Maintaining the survival of supply chain, improving the effectiveness of supply chain capital operation and reducing the overall management cost of supply chain have become important topics actively explored by all parties. As a result, "supply chain financing" series of financial products came into being.

Judging from the financing ratio of domestic small and medium-sized enterprises in recent years, the loan growth rate of small and medium-sized enterprises is higher than that of large enterprises. In 2009, major financial institutions, rural cooperative financial institutions, urban credit cooperatives and foreign banks provided RMB loans (including discounted bills) to SMEs, which increased by 3.4 trillion yuan. The year-end balance increased by 30. 1% year-on-year. At the end of 20 10, the balance of RMB loans (including discounted bills) of major financial institutions, rural cooperative financial institutions, urban credit cooperatives and foreign banks was 13.42 trillion yuan, up13.3% year-on-year; The balance of RMB loans of medium-sized enterprises was 10. 13 trillion yuan, up by 17.8% year-on-year, which was 4.5 percentage points higher than that of enterprises above designated size. The balance of RMB loans for small enterprises was 7.55 trillion yuan, up by 29.3% year-on-year, up by 300 billion yuan year-on-year, which was 16.0 percentage points higher than the growth rate of loans for large enterprises. 20 1 1 In the first half of the year, the balance of RMB loans to SMEs in all financial institutions in China was 20. 1 trillion yuan, up 18.2% year-on-year. Among them, the balance of small business loans was 9.7 trillion yuan, an increase of 865.9 billion yuan over the beginning of the year and a year-on-year increase of 25.9%. Compared with the end of 2008, 2009 and 20 10, the loan balance of SMEs increased by 3.7, 2.5 and 0.6 percentage points respectively. The proportion of new loans of large, medium and small enterprises to all new loans of enterprises is generally balanced. 20 1 1 year, the balance of RMB loans to SMEs in all financial institutions in China was 2 1.77 trillion yuan, up 18.57% year-on-year.

From 20 1 1, commercial banks are limited by the scale of credit, and the amount of loans they can issue is very limited. The deferred payment tools such as acceptance, bills and letters of credit can not only enhance mutual trust among enterprises, but also stabilize a group of customers. The banking industry has paid unprecedented attention to the supply chain finance business. At present, commercial banks have taken supply chain finance as one of the key points and breakthroughs in the process of business strategy transformation. Supply chain management has become the survival pillar and profit source of enterprises, and almost all enterprise managers are aware of the important role of supply chain management in enterprise strategy.

The value of supply chain finance to commercial banks lies in: first, supply chain finance realizes mutual benefit between banks and enterprises. Under the mode of supply chain finance, banks jump out of the limitation of a single enterprise, stand on the overall situation and height of the industrial supply chain, arrange financing for all member enterprises, and provide credit through the credit bundling of small and medium-sized enterprises and core enterprises. Secondly, supply chain finance can reduce the capital consumption of commercial banks. According to the relevant provisions of the Basel Capital Accord, the risk weight under trade financing is only 20% of the general credit business. Supply chain finance covers traditional credit business, trade finance and electronic financial tools. This provides a large space for banks to expand their intermediary business growth.

Brief introduction of supply chain finance

concept

Supply chain finance (SCF) is a professional field of credit business of commercial banks (bank level) and a financing channel for enterprises, especially small and medium-sized enterprises (enterprise level).

It means that banks provide customers (core enterprises) with settlement and wealth management services such as financing, and at the same time provide convenience for suppliers of these customers to receive loans in time, or provide advance payment and inventory financing services for their distributors. (Simply put, it is a financing mode in which banks link core enterprises with upstream and downstream enterprises to provide flexible financial products and services. )

The above definition is very close to the traditional factoring business and goods mortgage business (mortgage/pledge credit of movable property and goods rights). But there are obvious differences, that is, factoring and goods mortgage are only simple trade financing products, while supply chain finance is a systematic financing arrangement for all members of the supply chain, which is reached between core enterprises and banks.

purpose

Generally speaking, the supply chain of a specific commodity goes from the procurement of raw materials to the manufacture of intermediate products and final products, and finally the products are delivered to consumers by the sales network, which connects suppliers, manufacturers, distributors, retailers and end users as a whole. In this supply chain, the core enterprises with strong competitiveness and large scale, because of their strong position, often put forward harsh requirements for upstream and downstream supporting enterprises in terms of trade terms such as delivery, price and payment term, which has caused great pressure on these enterprises. Most of the upstream and downstream supporting enterprises are small and medium-sized enterprises, so it is difficult to obtain financing from banks. As a result, the capital chain is very tight and the whole supply chain is unbalanced. The biggest feature of "supply chain finance" is to find a big core enterprise in the supply chain and provide financial support for the supply chain with the core enterprise as the starting point. On the one hand, effectively inject funds into the upstream and downstream supporting small and medium-sized enterprises in a relatively weak position to solve the financing difficulties of small and medium-sized enterprises and the imbalance of supply chain; On the other hand, bank credit should be integrated into the purchase and sale behavior of upstream and downstream enterprises to enhance their commercial credit, promote the establishment of long-term strategic cooperation between small and medium-sized enterprises and core enterprises, and enhance the competitiveness of supply chain. Under the financing mode of "supply chain finance", once the enterprises in the supply chain are supported by banks, the "cord blood" of funds will be injected into the supporting enterprises, which means entering the supply chain, thus activating the operation of the whole "chain"; And with the support of bank credit, it has won more business opportunities for SMEs.

Supply chain concept

By controlling the information flow, logistics and capital flow, the supply chain starts from purchasing raw materials, manufactures intermediate products and final products, and finally delivers the products to consumers through the sales network, connecting suppliers, manufacturers, distributors, retailers and end users as a whole. It is not only the logistics chain, information chain and capital chain connecting suppliers and users, but also the value-added chain. Materials in the supply chain increase in value due to processing, packaging and transportation, which brings benefits to related enterprises.

Benefits of supply chain finance

"Supply chain finance" has developed rapidly because of its win-win effect of "effectively solving the financing problem of small and medium-sized enterprises and extending the in-depth service of banks".

First, new financing channels for enterprises.

Supply chain finance provides a solution to the concept and technical bottleneck of SME financing, and the SME credit market is no longer out of reach.

Supply chain finance began to enter the sight of many large enterprise finance directors. For them, supply chain finance, as a new financing channel, not only helps to make up for the traditional liquidity loan quota compressed by banks, but also reduces their liquidity demand level through the introduction of financing facilities by upstream and downstream enterprises.

Due to the intensification of industrial chain competition and the strength of core enterprises, credit sales account for a considerable proportion in supply chain settlement. Credit sale has become the most extensive payment condition for enterprises. On the one hand, the existence of a large number of accounts receivable caused by credit sales makes small and medium-sized enterprises have to face the risk of insufficient liquidity, and the capital chain of enterprises is obviously tight; On the other hand, as the potential capital flow of enterprises, the information management, risk management and utilization of accounts receivable are becoming more and more important to enterprises. Under the new situation, revitalizing enterprise accounts receivable has become an important way to solve the financing problem of small and medium-sized enterprises in supply chain. Some commercial banks have made fruitful innovations in this field, and China Merchants Bank's latest online A/R and A/P management system and online domestic factoring system are one of the innovations that have attracted much attention. According to the person in charge of the cash management department of China Merchants Bank Head Office, the system can provide comprehensive, transparent and fast electronic accounts receivable management services and domestic factoring business solutions for suppliers and buyers in supply chain transactions, greatly simplifying the complicated operation processes faced by traditional factoring business operations, especially helping to optimize the confirmation of creditor's rights transfer when buyers and sellers live in different places and help enterprises quickly obtain urgently needed funds.

Second, new channels for banks to open sources.

Supply chain finance provides a new channel for cutting into and stabilizing high-end customers. Through a package solution for the members of the supply chain system, the core enterprises are "bound" to the banks that provide services.

The main reason why supply chain finance attracts international banks so much is that it is more profitable than traditional business and provides more valuable opportunities to strengthen customer relations. In the context of the financial crisis, the above reasons are more sufficient. The potential market of supply chain finance is huge. According to UPS's estimation, the stock of accounts receivable in the global market is about $ 654.38+0.3 trillion, while the market potentials of accounts payable discount and asset-backed loans (including inventory financing) reach $65.438+000 billion and $340 billion respectively. By the end of 2008, 46 of the world's top 50 banks have provided supply chain financing services for enterprises, and the remaining four are actively planning to carry out this business.

"Through supply chain finance, banks not only deal with individual enterprises, but also deal with the entire supply chain. The information they have is relatively complete and timely, and the credit risk of banks is much smaller. " People from China Merchants Bank said that under the service and risk consideration mode of supply chain finance, because banks pay more attention to the trade risks of the whole supply chain, the evaluation of overall trade will include more SMEs in the service scope of banks. Even if a single enterprise can't meet some risk control standards of the bank, as long as the business between the enterprise and the core enterprise is stable, the bank can not only conduct independent risk assessment on the financial situation of the enterprise, but also grant credit to this business to promote the realization of the whole transaction.

Third, the economic and social benefits are remarkable.

Equally important, the economic and social benefits of supply chain finance are outstanding. With the help of the "group purchase" development model and the innovation of risk control means, the income-cost ratio of SME financing has been improved, and it shows obvious economies of scale.

According to statistics, with the help of supply chain financial solutions, the largest 65,438+0,000 enterprises in the United States reduced their liquidity demand by $72 billion in 2005 through the improvement of collection methods, inventory revitalization and deferred payment. Similarly, in 2007, the largest 65,438+0,000 listed companies in Europe earned 46 billion euros from accounts receivable, accounts payable and inventory.

Fourth, supply chain finance realizes multi-stream integration.

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

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