Analysis On Supply Chain Finance Of SMEs Of Pharmaceutical Industry

Pharmaceutical industry is an important industry related to social stability and economic development, more than90percent of which are small and medium-sized enterprises(SMEs) consist of upstream raw material suppliers and downstream pharmaceutical distributors. Because of being in their formative start-up stage, most of SMEs cannot raise enough money by internal financing channel, nor can they get enough fund from the strict capital market or the unsound private loan market. As an important financing channel for SMEs, credit financing is a difficult way for SMEs to absorb money from Commercial banks owing to SMEs’ own disadvantages and the incomplete credit market mechanism. Financing problem has been an important factor that restricts the development of pharmaceutical industry and pharmaceutical company. Financing problem of SMEs has not been resolved despite both government and commercial banks have rolled out some policies to support SMEs. Supply chain financing model is one of ways proposed by scholars to solve financing difficulty of SMEs. SMEs in supply chain financing model can upgrade their own credit rating to get money easier with the help of the core company of the supply chain.Different from the traditional credit mode, commercial banks in supply chain financing model issue a loan not just based on a single company’s comprehensive strength but according to the comprehensive strength of the whole supply chain、 upstream or downstream SMEs、the core company. Commercial banks provide comprehensive services to all companies of the supply chain, which achieves close conjunctions among flows of material、capital and information and relieves SMEs’ financial pressure to keep stable operation of the industrial chain. In the past, scholars usually conduct general study on supply chain finance, including operation mode and risk management, but they rarely did a research on a particular industry’s supply chain finance.This paper aims to analyze supply chain finance of pharmaceutical industry, which will be a steppingstone to the analysis of industry supply chain in future.On the basis of relevant literature review, starting with analyzing SMEs’ financing situation, not only does this paper study the advantages of developing supply chain finance for SMEs, but also this paper offer some advice on it, as follows. At first, on basis of the theories of information asymmetry, transaction costs and self-liquidating trade finance, this paper demonstrates that supply chain finance can raise SMEs’ credit rating, reduce information asymmetry and transaction costs and relieve SMEs’ financing pressure; In addition, taking w pharmaceutical enterprise for an example, this paper proves that supply chain finance makes SMES get loan from commercial banks easier by the way of raising SMEs’ credit rating; At last, this paper draw a conclusion that supply chain finance can relieve SMEs’ financing pressure, and put forward some suggestion on developing supply chain finance for SMEs, such as strengthening the theoretical research on pharmaceutical supply chain finance, perfecting relevant laws and regulations, encouraging commercial Banks to develop supply chain financing products with characteristic of medical industry and e-commerce platform of transaction for supply chain financing.