Risk Control Of Supply Chain Finance

Along with the rapid development of the world economy, the trend of economicglobalization and the labor division of society continue to deepen. Companies aregradually changed from vertical integration to the cooperation of the upstream anddownstream in the supply chain to enhance the work efficiency and the corecompetitiveness of enterprises. Supply chain financial service was born on this basis.Defined as a financial service developing based on trade financing, it is widelydefined as follows: on the basis of real transactions and with the starting point of coreenterprise, the bank takes control of capital flow, logistics and information flow in thesupply chain to supply products and services for the upstream and downstreamenterprises in the supply chain. Supply chain finance plays an important part in thesupply chain: Firstly, the bank injecting funds to the upstream and downstreamsupporting enterprise in the supply chain can effectively solve the financing problemof funding imbalances in the supply chain that the supporting enterprises are facing;Secondly, the bank integrating its credit into the entire supply chain will strengthenthe commercial credit among upstream and downstream enterprises, and will promotethe core enterprises and supporting enterprises to establish long-term and stablestrategic cooperative relations, which will benefit to the stability of the supply chainand the promotion of the competitiveness of the enterprises. Thirdly, the bank willtake charge of the transaction occurred in the supply chain more smoothly with theintegration of capital flow, logistics and information flow and reduce the probabilityof the risk occurring, which will upgrade the efficiency of supply chain transactions.While the supply chain financial service has been developing rapidly, the risks that itbrings to the supply chain stakeholders also cannot be ignored.From the risk control of supply chain finance on the commercial bank angle ofview and on the basis of research results summary and review of previous supplychain finance risk control study, this thesis firstly elaborates the generating process and basic definition of the supply chain finance and the positive significance to thecore enterprises and supporting enterprises; Secondly, based on the currentdevelopment of the mode in supply chain finance, the supply chain financial service isdivided into three parts: stock-based supply chain finance, prepayments-based supplychain finance and receivables-based supply chain finance. Then, point out the detailedrisks existed in the three mode to provide the basis for the propose of the regulatorymeasures; Thirdly, focuses on the identification and assessment of the financial risksof the supply chain, which includes the whole supply chain, core enterprises andsupporting enterprises; fourthly, focuses on the awareness and control of the supplychain and makes quantitative analysis about credit risk of the core and supportingenterprises, in which uses the CITIC Bank’s actual statistics in their operation of thesupply chain to demonstrate the effectiveness of the model to model the desired effectfinance business data on the usage of the model and achieves to the effect wanted; Atlast, this thesis gives some advice to the current insufficient situation in the supplychain finance.