The Analysis Of Accounts Receivable Pledged Financing Based On Supply Chain Finance

Small & Medium-sized enterprises (SEMs) play an indispensable role in Chinese economic and social development, but financing dilemma is always restricting SEMs'survival and development seriously. Banks and other financial institutes have designed Supply Chain Finance (SCF) products to solve SEMs' financing difficulties. Based on supply chain perspective, SCF is not the way that only focuses on borrowing entity in tradition and brings debt ranking method which emphasizing the cooperation stability of supply chain members, the truth of business, credit records and scale power of SEMs'counterparty (core enterprise). Core enterprise and logistic company participate in the supply chain business, which meets SEMs' financing demand and on the other hand SEMs improve their credit rating bound with core enterprise and banks reduce risks of giving credit to SEMs.The thesis demonstrates the theoretical foundation, definition and operating patterns of SCF. In 2007 the Real Right Law of the People's Republic of China was issued which makes it clear that account receivable can be pledged. SEMs lack ledge of immovables and new Real Right Law expands their financing channels. So the main content of thesis is account receivable financing. Core enterprise is in ascendant and powerful position of supply chain business, which tends to charge sales toward SEMs providers whose working capital is inefficient. SEMs providers couldn't pay materials and salaries in time which makes supply chain unstable. SEMs providers could apply account receivable financing to solve above problems. The thesis focuses on account receivable pledging, brings risk factors into consideration, assesses risk with Fuzzy Comprehensive Evaluation and sets suitable pledging ratio to reduce risks of banks. Then Cost Effectiveness Analysis is introduced to make comparison between traditional financing and SCF.Finally the case study would further explain that account receivable financing based on SCF is a good way to solve SEMs providers'financing difficulties and the pledging ratio comparison between account receivable financing and traditional financing is provided, so as to accelerate capital turnover ratio and improve the efficiency of capital usage, from which the providers, core enterprise and banks could gain benefits and supply chain could maintain its stability and competiveness.