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Research on zero plus one chain reform: blockchain technology application behind the decryption of supply chain financial potential explosion

Time : 20/08/2021 Author : s1aunt Click : + -
        In the supply chain, due to the time difference between expenditure and income before and after delivery of downstream enterprises, there is a funding gap. Supply chain financial service providers can provide financing services during the time difference of funds through risk control variables. In this process, capital, as a solvent in the supply chain, can increase the liquidity of the industry. Supply chain finance is a financing mode that banks connect core enterprises with upstream and downstream enterprises to provide flexible financial products and services. The good operation of supply chain finance can reduce the operation cost of the whole supply chain, and build an industrial ecosystem of mutually beneficial coexistence and sustainable development of banks, enterprises and supply chain through the cooperation of financial capital and the real economy.
        Although supply chain finance is still in its infancy in China, there are many pain points, but with the country has issued relevant policies to continue to support the development of supply chain finance, help alleviate financing problems, and promote the layout of supply chain finance business by many enterprises. The accelerated implementation of blockchain related technologies has accelerated the development of the supply chain financial "chain". In recent years, driven by the growth of trade activities, the improvement of financing penetration rate and the favorable regulatory environment, the prospect of China's supply chain financial market has been promising. The growth of various supply chain transactions and businesses has promoted the continuous growth of assets. The balance of supply chain assets increased from 16.7 trillion yuan in 2016 to 24.9 trillion yuan in 2020, with an average annual compound growth rate of 10.5%.
        The state clearly promotes the development of supply chain finance and successively issues relevant policies to support it. In April, 2019, the general office of the CPC Central Committee and the general office of the State Council issued the guiding opinions on promoting the healthy development of small and medium-sized enterprises (hereinafter referred to as the Guiding Opinions), which put forward five measures around the long-standing financing difficulties and high financing costs of small and medium-sized enterprises. In July 2019, the China Banking and Insurance Regulatory Commission issued the guiding opinions of the general office of the China Banking and Insurance Regulatory Commission on promoting supply chain finance to serve the real economy. The opinions required that bancassurance institutions should rely on the core enterprises of the supply chain, integrate logistics, information flow, capital flow and other information based on the real transactions between the core enterprises and upstream and downstream chain enterprises, and provide financing, settlement Cash management and other comprehensive financial services.
        The guidance and implementation of the policy pointed out the direction for the development of the industry and promoted the active promotion and development of relevant work in the supply chain industry. According to the preliminary statistics of the China Banking and Insurance Regulatory Commission, by the end of December 2020, the loan balance of small and micro enterprises nationwide was 42.7 trillion yuan, of which the loan balance of inclusive small and micro enterprises was 15.3 trillion yuan, an increase of 30.9% year-on-year, 18.1 percentage points higher than the average growth rate of various loans. Among them, the loan balance of small and micro enterprises of five large banks, ICBC, ABC, BOC, CCB and Bank of communications, increased by nearly 59%, much higher than the 40% increase required by the government work report. As an important financing mode of supply chain finance, a large number of accounts receivable and inventory have a great impact on the operating cash flow of small and medium-sized enterprises, which in turn affects the stability of the whole supply.
        In 2020, the accounts receivable of Industrial Enterprises above Designated Size in China were 16.41 trillion yuan, an increase of 15.1% over the end of last year, which laid a solid foundation for the development of supply chain finance in China. In addition to accounts receivable, financial leasing and supply chain finance are also closely linked. In the past ten years, China's financial leasing industry has experienced rapid development. According to the data released by China Leasing alliance, the total number of Chinese financial leasing enterprises (excluding single project companies, branches, SPV companies, local leasing enterprises in Hong Kong, Macao and Taiwan and overseas acquisition enterprises) in 2019 was about 12130, an increase of 353 compared with 2018, an increase of 2.91%.
        With the development of networking, digitalization and intelligence, supply chain finance has formed a financial ecosystem integrating capital flow, logistics, information flow and business flow. With the maturity of new technologies such as the Internet of things, big data, artificial intelligence and blockchain, the industry's risk management ability will continue to improve. Generally speaking, supply chain finance is still in its preliminary stage in China, but thanks to policy support, the continuous development of accounts receivable and financial leasing markets, the continuous expansion of capital sources and the continuous enhancement of risk control means, the development of supply chain finance in China has gradually accelerated. While the supply chain finance industry is developing well, the obstacles related to the development of the industry can not be ignored. "Need to borrow" and "can borrow" are two factors that affect the scale of the supply chain financial market. It is not difficult to find that for enterprises that "need to borrow", the problem of "cannot borrow" still exists.
        Supply chain finance is based on the real trade situation from the beginning to the end of the supply chain, and takes the determinable future cash flow generated by trade as the direct repayment source. The key points of enterprise financing in the "four in one" supply chain are: capital flow, information flow, logistics and business flow. According to the law, some business information between enterprises needs to be transmitted in the form of paper bills. Building information systems between enterprises with information internet technology will lead to problems such as unreliable data security and unreliable data accuracy. The lack of a unified business information system among enterprises makes it difficult to integrate the four streams, resulting in difficulties in SME loans, bank risk control and supervision by relevant departments. Data show that by 2020, there are about 38 million small and medium-sized enterprises in China, accounting for more than 98% of the total number of Chinese enterprises.
        Small and medium-sized enterprises are an important part of China's economy, contributing more than 60% to the national GDP in 2019. However, only about 30% of social financing was allocated to SMEs in 2019. It can be seen that the liquidity demand of small and medium-sized enterprises is growing, but most of them have not been met. Under the current market background of the prevailing credit sales mode, suppliers in the upstream of the supply chain often have a large financing gap, which is difficult and expensive to finance. However, without the endorsement of core enterprises, it is difficult for them to obtain high-quality loans from banks. The interest cost of private lending is often high. For example, under the inventory financing mode, there are risks of warehouse receipts counterfeiting and warehouse managers' theft. In contrast, accounts receivable financing is easier to carry out, but it can only help first-class suppliers with supply chain financing, and the problem of fund shortage of multi-level suppliers is still difficult to solve.
        For financial institutions such as banks, the opacity of enterprise information means that it is more difficult to control risk, which is a huge obstacle to enterprise financing and the penetration of financial institutions. However, the ERP systems of enterprises in the same supply chain are not interconnected, which leads to the fragmentation of enterprise information, and it is difficult to integrate information in the whole supply chain. The problem of information island leads to the fact that the indirect trade information between upstream suppliers and core enterprises cannot be proved, the credit of core enterprises cannot be transmitted, and the traditional supply chain financial instruments have limited ability to transmit the credit of core enterprises. Bank access conditions are relatively high, and commercial bills have the problem of low credit. As a result, under the traditional supply chain finance mode, core enterprise credit can only be transferred to primary suppliers, and cross level supply cannot be achieved in the whole supply chain. Multi level suppliers cannot use core enterprise credit to carry out loan financing, and their ability to solve the problem of difficult loans for small enterprises is limited.
        In the supply chain scenario, core enterprises endorse a credible trade background, while other small and medium-sized enterprises lack the strength to prove their repayment ability and the existence of trade relations. At the same time, small enterprises lack a perfect management mechanism, and their financial statements are not standardized. Under the existing bank risk control system, it is difficult to obtain bank financing; Relatively, it is difficult for banks to penetrate into the supply chain to obtain customers and lend money. The payment and agreed settlement between suppliers and buyers, financing parties and financial institutions are limited by various performance risks, and the contractual spirit and willingness of participants cannot be effectively controlled. Especially when multi-level supplier settlement is involved, there are many uncertain factors, including fund misappropriation, malicious default or operational risks.
        At the same time, the traditional warehouse receipt pledge business, the warehouse receipt business system built around the logistics enterprise, has the problem that the bank does not obtain the warehouse receipt information in time, and there may be the risk that internal personnel may forge the bank's release information on the warehouse receipt, causing losses to the capital side. There are still many problems in the traditional supply chain financial model, and it is difficult to maximize the market scale. We need to reduce the difficulty of risk control and supervision, so that more "non loan" enterprises can "loan". As the "outlet" of current information technology, blockchain technology is a fusion technology in many fields, such as digital encryption, point-to-point communication, distributed ledger, multi-party collaborative consensus algorithm, etc. it has the characteristics of being tamper proof and traceability of data on the chain. Corresponding to the business pain points in the traditional scenario of supply chain finance that requires multi-party participation, blockchain technology just has its place to be used.
        As a trust mechanism, blockchain can eliminate the pain points related to supply chain finance, such as information asymmetry and mutual distrust between partners, and become an important solution to break through the existing bottlenecks in the industry. The relevant applications are as follows:. Generally speaking, the upstream and downstream of a core enterprise converge to integrate hundreds of small and medium-sized suppliers and dealers. As a kind of distributed ledger technology, blockchain collectively maintains a distributed shared ledger, which enables non-commercial confidential data to be stored and shared among all nodes, so that data can flow reliably on the chain, which greatly solves the problem of information island in the financial business of the supply chain. After the primary supplier signs and receives the vouchers issued by the core enterprise, it can split and transfer them to the superior supplier according to the real trade background.
        In the process of splitting and circulation, the endorsement utility of core enterprises remains unchanged. The whole voucher splitting and circulation process can be traced back to the source. The transferable and financing right confirmation certificate registered on the blockchain enables the core enterprise credit to be transferred along the trusted trade link, and solves the problem that the core enterprise credit cannot be transferred to multi-level suppliers. The original debtor of the bookkeeping voucher is the core enterprise, so in the financing scenario of a bank or factoring company, the process that originally needed to review the trade background can be seen at a glance on the platform, and the financing problems of multi-level suppliers can be easily solved. Under the blockchain architecture, the system verifies the data in multiple dimensions based on all kinds of real-time and dynamic information obtained in the trading network, which can improve the reliability of the main data; At the same time, it can restrict the behavior of the trade participants in the supply chain, and then integrate the relevant transaction data into the chain to form online basic contracts, documents, payments and other structured and complete records to prove the authenticity of trade behavior.
        Such as the matching of purchase data and logistics data, the confirmation of inventory data and sales data, and the reliability of core enterprise data and downstream chain data, so as to reduce the process friction caused by information asymmetry. The financing services of banks can also cover other small and medium-sized enterprises in the supply chain other than core enterprises and their primary suppliers. While enriching credible trading scenarios, it greatly reduces the participation cost of banks. Smart contract is a computer program of contract terms on blockchain, which can be automatically executed when the execution conditions are met. The addition of smart contracts can provide automatic operation tools for the execution of supply chain financial business. Relying on the efficient, accurate and automatic execution of contracts, it ensures that both or more parties to the transaction can fulfill their obligations as agreed in the trade behavior, so that the transaction can be carried out smoothly and reliably.
        Taking real right financing as an example, payment instructions can be sent to the bank through smart contracts after delivery, so as to automatically complete fund payment, liquidation and financial reconciliation, improve business operation efficiency, and reduce potential risks and losses caused by human operations to a certain extent. Blockchain realizes the automatic confirmation of movable property rights for all participants in the supply chain, forms a right ledger that is difficult to tamper with, and solves the pain points in the registration and Realization of existing rights. Taking the rights of accounts receivable as an example, the real-time digital right confirmation is realized through the data link of the core enterprise ERP system, which avoids the delay of right confirmation in reality, and is of great significance to improve the security and traceability of transactions.
        Upstream and downstream small and medium-sized enterprises can more effectively prove the authenticity of trade behavior and share the credit of core enterprises. They can actively respond to market demand and meet the demand for financing at the same time, fundamentally solve the problem of "difficult and expensive financing for small and micro enterprises" in the supply chain, realize the purpose of "destocking" of core enterprises, and achieve the goal of "optimizing the supply side", so as to improve the efficiency of capital operation in the whole supply chain. With the continuous deepening and development of blockchain technology, blockchain has the ability to achieve distributed collaboration between the main bodies of the supply chain financial ecosystem and develop towards an open-source community ecosystem while protecting the privacy of enterprise data. In the blockchain supply chain financial ecosystem, the transaction data on the chain are dynamic, auditable and traceable, which enhances the liquidity of assets in the supply chain market and optimizes the financial instruments in traditional supply chain finance.
        1. Prospective industry research institute "analysis of the current situation and development trend of China's supply chain financial market" 2. IResearch consulting "China blockchain + Supply Chain Finance Research Report".
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