The Research Of Risk Management In Supply Chain Finance Of Commercial Banks In China

With the status of small and medium-sized enterprises (SMEs) in China’s nationaleconomy continues to strengthen, SMEs has become an important driving force of ourcountry’s rapid economic sustainable development. However, SMEs due to their own lackof institutional reasons and congenital deficiency, it is difficult to get support fromtraditional commercial bank credit financing model, greatly inhibited the development ofSMEs.In recent years, supply chain finance as a new financing model provided bycommercial banks, to circumvent the limitations of traditional credit financing for SMEs interms of guarantees, and greatly expand the financing channels for SMEs, and thereforedevelop rapidly in China. But as a kind of innovative financial products, supply chainfinance various risks exist not only in traditional commercial bank credit, but also in theintroduction of supply chain and therefore risks arising from the unique supply chainfinance. So how to ensure stability and security of supply chain by effective riskmanagement has become an issue, that commercial bank must be considered in developingsupply chain finance.This paper is based on predecessors’ research results, theoretical analysis, combinedwith banking practice, conduct research on supply chain finance model, and throughelaboration of processes of accounts receivable financing, confirming warehouse financingand FTW financing, provide guidance of using the supply chain financial products andservices to effectively alleviate the financing problems of SMEs to commercial banks.Meanwhile, this paper analyzes the main risks that the supply chain finance business facedwith, the risks of different modes of supply chain finance and the problems in riskmanagement of commercial banks currently existing in the supply chain finance. Andproposed risk management strategies in supply chain finance, mainly introduced toimprove financial access for the supply chain system and the bank’s internal control system, the construction of an effective information service platform, improve relevant laws andregulations and other policies. And then the paper introduced three important means of riskmanagement, including cash flow management, structured credit and credit assetsecuritization. This paper can provided a practical application to the supply chain financefor commercial banks to manage risk management, and gave certain guidance for China’scommercial banks to make the supply chain management of financial risks.