Supply Chain Finance - Commercial Bank Business Development, New Direction

Supply chain finance (SCF) is a kind of corporate-banking business model whose development is devoted in by many international commercial banks in recent years. It is closely integrated with modern supply chain of production, and applicable financial products are designed according to the characteristics of purchase & sales transactions between core enterprises and upriver-downriver enterprises to solve supply chain member companies' fund bottlenecks, meet their financing needs and increase efficiency in the use of funds. SCF already has a wealth of theories and practice in Western countries. Its primary collaterals are current assets such as accounts receivable and inventory, and SCF highly stresses the certainty of trading background and authenticity of fund use. These attributes make it extremely popular among major international commercial banks, which were seriously tortured by asset bubble and high financial leverage in the financial crisis. SCF has become one of the most important corporate-business models of international commercial banks.Since our country joined the WTO, domestic commercial banks, in the face of fierce competition from international ones, have been seeking new direction of business transformation and development. SCF can help banks effectively reduce business risk, increase revenue and enhance product innovation capacity, and some individual bank succeeded in corporate- business transformation through SCF, so it's a practical transformation road worthy of being attempted. Additionally, SCF offers a viable solution to the long-standing financing problems of small & medium size enterprises in our country, and it can also play a role on the improvement of the domestic financial system.This thesis is composed of five chapters, the first chapter gets the supply chain and supply chain finance background information for a quick confession, and reviews SCF related theory and practice of the home and abroad literature study. ChapterⅡdescribes the emergence and development of SCF abroad, then theoretically explains the importance of SCF for improving supply chain overall benefit, and finally summarize some major products under SCF. ChapterⅢintroduces the SCF practice in China, lists the main SCF models of domestic commercial banks, and taking Shenzhen Development Bank as an example, discusses the special double -level credit assessment system and risk management outline of SCF. ChapterⅣdescribes SCF's significance for domestic finance, concluding that SCF can effectively improve the competitiveness of commercial banks and provide some help to solve the financing problems of small & medium size enterprises. Chapter 5 analyses SCF development problems in our country, including the legal environment, commercial banks' organization, regulatory concept, and so on, and gives recommendations to corresponding issue. Finally we predict that SCF will achieve fast growth because of large amount of potential demand and domestic financial situation.