Development And Risk Prevention Of Accounts Receivable Financing In Supply Chain

Supply chain finance(SCF) is the business innovation of commercial banks in recent years, which provides a new way of finance, in order to solve the financing difficulty of small and medium enterprises(SMEs). Along with the economic development, in technology innovation, profits, industrial production, expansion of employment, as well as import and export have made an important contribution to the economic growth. But a large number of SME surveys show that small SMEs are lack of collateral or with limited supply of collateral. when borrowing from banks or financial institutions, because of low technological content of their products, credit accumulation, inadequate financial management standards, And, because of the historical causes of China’s trade, SMEs’ credit debt is serious. SMEs mostly have accounts receivable and inventories. In order to stimulate SME’s assets, supply chain finance emerged.Supply chain finance relys on logistics,which was early known as "logistics finance". In China it has developed more than 10 years. This article focuses on the essence, characteristics and the significance of aspects of supply chain finance,which is the core enterprise of supply chain and related products supporting enterprises as a whole, according to the trade relationship between enterprises in supply chain and industrial characteristics based on title and cash flow of financing models for controlling total financial solutions. Supply chain finance only has close trade relations with large core enterprise supporting enterprise, which enables supply chain financing to reduce risk to the business because of core binding corporate responsibility.Chinese accounts receivable paragraph financing exists of risk should be found from analysis of accounts receivable paragraph financing of specific mode and features in accounts receivable paragraph pledge financing of aspects. China accounts receivable paragraph financing business is currently also emerging business, Its legal regulations and the judicial standard are not perfect enough, nor is the risk control technology. Related legal real right method of implementation, currently also has only several years of history. This article stresses that there is subject risk, legal risk, moral risk and market risk in China accounts receivable paragraph. Therefore, banks and financial institutions must take appropriate technical and policy to prevent heavy losses in granting loans to SMEs speed and limit evaluation mechanisms.The emerging receivables financing’s the health development needs joint efforts of government, banks and SMEs. Government should introduce effective legal regulations to make a business of development to be legal and protected by the law. Bank should strengthen approval process of auditting and evaluation,according to the domestic natural resources. Banks should make financing business risk assessment mechanism of accounts receivable paragraph of pledge more effctive, improve risk management technology, and study enterprise of claims debt capacity, financing of turnover speed. Each commercial banks focuseing on the enterprise supply chain field that they are familiar with has to ensure market share and profit level of their own; SMEs must strengthen their construction, make the governance structure of their company perfect, strengthen risk management,and develop a financial management system, In addition,SMEs should strengthen the building of enterprise culture and awareness of laws and regulations, strengthen credit management, avoid systemic risk, establish and improve the system of enterprise credit management to realize receivables before during and after the process of management. Only by the joint efforts among Government, financial institutions and SMEs, can we achieve a win-win outcome and promote an healthier Chinese economy.