The Research Of Financing To Chinese Retail Supply Smes Based On The Model Of Suplier Finance Of JC Group

The SMEs(small and medium-sized enterprises) in China have been a sort of new uprising power of Chinese economy. Nevertheless, the Chinese SMEs are currently confronting with the reality of lack of funds and difficulty in finance which is particularly prominent for the small and medium-sized suppliers of retailers accompanying with the rapid development of retail.This thesis firstly makes analyses on the macro situation and on internal and outside reasons of SME's financing dilemma from the perspective of SMEs. The article introduces the model of supplier finance with the example of the financing project promoted in China by JC Group, who is one of the largest retail groups in the world, and BD Bank. The introduction of this model is based on the studv both of the model of Supply Chain Finance which is currently applied in the overseas retail industry and of the current situation of SMEs, retail companies and banks in China. The supplier finance is composed by a core company who acts as the repayment guarantee, a commercial bank who loans only to the direct suppliers of the core company, who are the third component of this model, according to the information offered by the core company instead of providing loans to all the companies on the whole supply chain. The bank turns to provide a promote loan to a single trade between the core company and its supplier more frequently through less focusing on the financial indicators, the firm size and the guarantee pattern of the company who applies for a bank loan. It is indicated afterwards that confronting with the risks resulted in by the new model, the appraisal of qualified supplier to loan to by the core company becomes the key factor of this model. As the result, objective and subjective indicators are proposed to help select qualified suppliers which reduce the possibility of repayment default.This thesis is conducted to provide some enlightenment on helping the Chinese SMEs get ride of the financing difficulties through the introduction, analyses and application of the model of supplier finance in the small and medium-sized supply companies in retail in current China.