Accounts Receivable Financing In Supply Chain Financing

Supply chain finance emerges and starts to boom with the development of the market economy, which intensifies the competition between the supply chains. Considering the difficulty in financing for the small and medium enterprises(short for SMEs), the concept of account receivable financing in supply chain finance is hence put forward. Accounts receivable financing aims at acquiring the financing and loans from the banks for the SMEs by making full use of the standing reputation of the core enterprises. It provides a solution to work out the problem of the operating capital shortage due to the loaded receivable accounts and paves the way for the well operation and development of the supply chain as a whole. Meanwhile, it makes up a new area in bank financing which helps boost the bank performance.Given the market circumstances, this paper introduces the concepts concerning the account receivable financing and establishes corresponding credit risk assessment system for accounts receivable financing for SMEs. The Internet hierarchical analysis approach and fuzzy comprehensive assessment method are adopted to analyze the credit risk quantitatively and suggestions are proposed for banks to risk aversion. Then, the game model for account receivable financing in supply chain is proposed to elaborate the process of decision-making between the SMEs, core enterprises and banks and reach out for the optimal strategy for each party based on the maximum benefit to gain under the decentralized and joint decision making pattern. It is found that the results gained under the decentralized decision-making pattern outcomes that under the joint decision-making pattern. So, the paper proposes the infinite repeated game model based on decentralized decision making and it is found that there is a certain range for the interest ratio of loans set by the banks that are feasible for core enterprise to pay back the loans in accordance with the stipulations and optimize the interests of each party.This paper lays a solid theoretical foundation and provides practical enlightenment for the management and proper decision-making of credit risk when the SMEs, core enterprises and banks conduct the accounts receivable financing.