Supply chain finance is showing a vigorous development trend
The China Council for the Promotion of International Trade recently released the "Global Supply Chain Promotion Report 2024" at the 2nd Chain Expo. The report shows that in 2023, the scale of China's supply chain finance industry will be about 41.3 trillion yuan, a year-on-year increase of 11.9%, with an average annual compound growth rate of 20.88% in the past five years, showing a vigorous development trend. Maintaining the stability and smoothness of the industrial chain and supply chain, promoting the coordinated development of enterprises on the chain, cannot do without the assistance of high-level financial services. Currently, some on chain enterprises have significant funding gaps and are facing difficulties such as financing bottlenecks. Supply chain finance relies on the credit capability of core enterprises that dominate the chain as a guarantee, and relies on the overall supply chain credit to effectively solve the problem of financing difficulties for enterprises on the chain. In recent years, various banks and other financial institutions have leveraged their own advantages, actively responded to the financing needs of on chain enterprises, provided systematic financial solutions, and provided financial support for the efficient operation of the supply chain.
What convenience will these industries closely related to daily life, such as the automotive chain, home appliance chain, food and beverage chain, bring to enterprises and consumers when they are combined with the supply chain? At the second Chain Expo, the reporter saw that Bank of China has set up a "Bank of China Smart Chain" exhibition area covering ten major industry sub chains, attracting many visitors to stop and visit. Wang Lei, Senior Product Manager of the Transaction Banking Department of Bank of China, introduced that unlike universal and singular services, "Bank of China Smart Chain" combines the characteristics and needs of enterprises in different industries' supply chains to develop targeted solutions and provide more accurate services for enterprises.
Taking the home appliance chain as an example, Bank of China provides comprehensive financial service support to upstream component manufacturers, downstream distributors, and end consumers based on the financial needs of the entire industry chain, with machine manufacturers as the center. This not only helps to improve the quality and upgrade of the industry, but also enables consumers to purchase affordable and high-quality home appliance products, "said Wang Lei.
Specialized and innovative small and medium-sized enterprises play an important role in the process of supplementing, consolidating, and strengthening their chains, and due to their growth potential, they have an urgent need for financing. In order to promote efficient integration between enterprises and capital, during this year's Chain Expo, the National Small and Medium sized Enterprise Development Fund Co., Ltd. and Bank of China jointly held the "One Month One Chain" investment and financing roadshow. Heads of specialized, special and new SMEs from semiconductor, intelligent manufacturing, edge computing and other industries introduced the company's main business, competitive advantages and innovation highlights to the investment institutions present. Enterprise leaders have expressed that the event has provided a display platform for the company and offered convenient financing channels. It is reported that after the event, several investment institutions have reached preliminary cooperation intentions with the enterprise, which is expected to effectively promote the continuous advancement of the enterprise in technology research and development, market expansion, and other aspects.
With the continuous generation of a large amount of information data in the production and operation process of enterprises, financial technology plays an increasingly important role in improving the efficiency of supply chain operation. At the Supply Chain Service Theme Forum of this year's Chain Expo, many industry insiders believe that with the support of financial technology, credit reporting methods for on chain enterprises have become more diverse and abundant, products are becoming more digital and online, and many business processes can be completed online, greatly improving approval efficiency.
Bao Xiaochen, Vice President of Industrial and Commercial Bank of China Beijing Branch, said that ICBC has cooperated with "chain owner" enterprises to build a supply chain financial service platform, integrating data on the entire chain's capital flow, credit flow, logistics, information flow, etc., and conducting rapid and accurate analysis of enterprises on the chain, achieving timely response to settlement, financing and other needs, and controlling the non-performing loan rate at a low level.
Zhang Yong, Deputy General Manager of the Corporate Institutional Business Department of the Head Office of Bank of Communications and Vice President of the Beijing Branch, introduced that on chain enterprises have high requirements for the timeliness of fund receipt during peak periods such as the beginning and end of the season. In response to this demand, Bank of Communications relies on technological means and comprehensively applies emerging technologies such as enterprise accurate profiling, intelligent information matching, and cloud computing to establish an agile project docking mechanism. It has launched nearly 10 second level financing products, reducing the average loan disbursement time from one or two days to within one minute, effectively alleviating the situation of long payment cycles and tight working capital for enterprises, and ensuring stable turnover of supply chain funds.
In the process of industrial and supply chain financing, there is also a phenomenon of relying heavily on core enterprises to provide credit endorsement, rights confirmation, and repayment commitments. Zhang Yong stated that Bank of Communications, based on digital technology, standardizes the current complex technical terms, document agreements, and other contents, to a certain extent, realizing the open sharing of transaction information, so that supply chain finance no longer overly relies on the credit of core enterprises, and further expands the supply chain de nuclear model.
Looking ahead to the direction of financial services' support and guarantee for industrial and supply chains, Zhao Ping, President of the Research Institute of the China Council for the Promotion of International Trade, said that we need to innovate cross-border financing products and services, and enhance financial institutions' support for core and key node enterprises in the supply chain. At the same time, utilizing new technologies such as blockchain, Internet of Things, and big data to enhance the digitalization level of supply chain finance. In addition, it is necessary to leverage the credit transmission role of core enterprises, integrate bank credit into the purchasing and selling behavior of upstream and downstream enterprises, and enhance the commercial credit of various business entities on the chain.
Source: Economic Daily