The Financing Models And Risk Analysis Of Supply Chain Finance

Information asymmetry between the banks and Small-Middle Enterprises(SMEs) is the main reason for the problem of the lack of mortgage in SMEsfinancing. Under the trends of industry competition transforming fromenterprises to supply chains, developing supply chain finance can contribute tosolving the problem of the lack of mortgage in SMEs financing. Base on the truebusiness relationship, introducing the core enterprise and the cooperate logisticsupervisor, through special control of capital and logistic, self-liquidating credittechnology and the core enterprises’ credit binding and guarantees technology,supply chain finance can improve the information asymmetry problem betweenthe banks and SMEs and isolating the credit risk of SMEs.Base on reviewing the research of supply chain finance at home andabroad, this paper research the developing background, the conception, thecharacteristics and the significance of supply chain finance, explore the threemain financing models of supply chain financing, present the practices ofsupply chain finance that are applied both at home and abroad, and mainlydiscusses the financing problem of the supply chain finance as follow:Firstly, we research the operation principle of supply chain financing.Through modeling and numerical study, we compare commercial bank’sindependent loan decision making to a manufacturer and a retailer that form atwo-level supply chain with join decision making to this supply chain. The resultof the game analysis between bank and the manufacturer and the retailershows that the commercial bank can makes much more profit throughsupplying joint loan service to the whole supply chain, and meanwhile thesupply chain can achieves high performance as a whole, obtaining a win-winresult.Secondly, through game modeling, we research that in the course of thecompetition and cooperation between the core enterprise and the cooperativeenterprise that have unequal forces, the cooperative enterprise may break thecontract unilaterally in order to pursue short-term interest under the static singlegame situation. However, under the competition and cooperation between the core enterprise and the cooperative enterprise which possessing far moreinfinite repetitive game characteristics, the core enterprise can prevent thecooperative enterprise from breaking contract and pursuing short-term interestby monitoring or signing appropriate agreements and setting certainpunishment of breaking contract. Base on these measures, the core enterprisehas the willing to undertake the responsibility of credit binding or guarantee inorder to resolve the cooperative enterprise’s difficulty of cash shortage andpromote the smooth operation of the supply chain.Thirdly, we analyze and summarize the risks faced and the correspondingmeasures that should take by financial institutions which take part in supplychain financing business, research the risk of collusion by the borrowingenterprise and the logistic cooperative enterprise through modeling analysis.The result shows that the financial institutions can raise the possibility ofdetecting the collusion through improving the skills of detecting, increasing thepenalties of collusion and the difficulty of collusion transaction between theborrowing enterprise and the logistic cooperative enterprise.