Study On The Risk Management Of SMEs' Supply-Chain Finance

Small and medium-sized enterprises (SME) as the important part of Chinese economy are playing the key role of Ningbo's regional economy which relied on international trade. However, the factors as shortage of hypothecated goods, nonstandard finance management and instable forecast of SMEs made them trapped in difficulties of financing from commercial banks. As a result, most of SMEs are in shortage of fund for further development. In this condition, Supply-chain financing(SCF) is considered as a recommendatory settlement of SMEs'financing problems by commercial banks in China, but distemperedness of credit system and risk management skills are blocking the development of SCF in China. Therefore, research of risk management in SMEs'SCF model can be helpful as the settlement of this practical problem.This paper starts with the research of SCF business models and its advantages of solving SMEs'financing, then points out the risks including credit risk, operational risk and market risk which hidden in SCF process, and analyzes their causes. Considering above comments, this paper demonstrates the basic elements of constructing a risk evaluation system of SCF, which focus on the Chinese developing corporate management, credit system and legal environment, and classify the risk management approaches into four types as external monitor, internal management, Market compensation and professional training. Based on the conclusion the research on SCF business model and risk management, researcher set a comparison of case studies in order to verifying efficiency of the risk evaluation system to solve the SMEs'practical financing problems in Export-oriented economy as Ningbo. The positive result certificates the advantages of SCF which can help building up a win-win relationship between SMEs and commercial banks in Ningbo. However, the research also showed the problems generated by the weakness of current credit and legal system in China.