Case Studies Of Supply Chain Financing Mode

In recent years,financial organizations and enterprises are keen on promoting supply chain finance as it not only meets the requirement of China’s current economic development,but also financial organizations’ needs including reducing risk,developing customer channels.With constant development of China’s industrialization,industry chain is going forward to the direction of deepening and fine differentiation.Small and medium enterprises(SMEs)are playing an increasingly important role in the whole supply chain.Supply chain finance in advanced countries have had more mature development mode,but it develops faster in China although it started late.The first bank that first launch the inventory financing as a pilot business was Ping’An Bank(formerly Shenzhen Development Bank)as early as 2001,other state-owned banks and joint-stock banks also carried out supply chain finance services according to their own characters.Firstly,the paper describes the background and importance of developing supply chain finance and the research results and documents both from home and abroad.Secondly,the writer introduces the logic structure,research methods and innovation of the paper.The innovation is based on RAROC calculation of 2 case studies which including 244 enterprises samples.The paper makes comparison of sample enterprises’ RAROC under real conditions and RAROC of enterprises without enjoying supply chain finance service.The paper suggests the ways how to improving bank’s internal rating system and how to raise revenues and strengthening risk control of supply chain financing through using internet and internet of things technology.And then,the paper overviews the features and main classification modes of supply chain finance,as well as the risk theory research on supply chain finance.Concerning risk,the paper tries to analyses the common risks including credit risk,legal risk and operation risk that supply chain finance and other financing modes all share at the very beginning.And then the writer studies the supply chain finance through the following three angels: information flow,logistics and cash flow,the paper points out three problems: first,due to there is bullwhip effect in supply chain finance service,it will cause the risk of information distortion and asymmetry.Second,if the third party logistic enterprises break a contract and causes poor regulation of Chattel mortgage,it will trigger bank losses.Third,core enterprises’ credit risk will be passed throughout the whole supply chain via money chain of upstream and downstream purchase and sales.By analyzing the characteristics of supply chain risk,the writer proposes effective means to prevent and control risks.In chapter 4,the paper analyzes the cases of account receivable financing pattern and advance financing pattern,and calculates the sample enterprises’ capital return rate through bank’s internal rating corresponding to probability of default(PD)and loss given default(LGD)rate after risk adjustment.In case study 1,the writer compares RAROC calculated by bank’s PD and LGD and that of calculated by actual bad rate by taking 34 enterprises samples that was contained in state-owned group A’s supply chain financing project,as well as being compared with PAROC of those enterprises under the loan market.Through the comparison,the writer gets the result that supply chain finance plays a positive role on reducing the credit risk of enterprises and it will get more accurate and objective RAROC through adding evaluation indexes of supply gain into bank’s internal rating system.In case study 2,the writer studies 90 enterprises samples of downstream dealers of automobile manufacturer B and C through analyzing the advance financing pattern.By seeing the real RAROC graph,the readers would clearly know that in the case of automobile dealer,it will make larger influence on the company’s business condition,its rating in bank and RAROC if the dealer sells different brand cars.The writer summarizes the key points of risk control through analyzing the characterizes of advance financing pattern.In the conclusion section,the writer summed up the suggestions of solution for the future risks of supply chain risks of supply chain finance,the shortcomings of the paper as well as the problems that supply chain finance need to be solved in the future.