A Study On Supply Chain Finance Inventory Portfolio Pledge Financing Risk

Since the reform and opening up,China's economy has developed rapidly and its GDP has continued to grow steadily.This achievement is inseparable from the huge contribution of China's SMEs.However,as the backbone of China's economic development,SMEs are often limited in their own development due to difficulties in financing and high financing costs.In recent years,with the popularization and widespread application of the supply chain finance model in China,the financing problem of SMEs has been significantly improved.Supply chain finance mainly has three modes: inventory pledge financing,account receivable financing and prepaid account financing.Among them,the inventory pledge financing model refers to the business model in which the enterprise pledges its own raw materials,semi-finished products or finished products and other inventories to financial institutions such as banks to obtain funds.Because the inventory pledge financing model can revitalize the in-transit materials and the accumulated funds occupied by the finished product inventory after the enterprise purchase,it is a relatively common financing model for small and medium-sized enterprises.Although the inventory pledge financing model is an innovative financing model in the supply chain finance field,it has greatly eased the financing problems of SMEs.However,due to the late start of inventory pledge financing business in China,the development is still in the primary stage.The operation will be impacted by various influencing factors and face many risks,such as macro risk,market risk,liquidity risk,credit risk,legal risk,etc.Especially in recent years,the inventory pledge financing model has developed rapidly in a diversified direction,and new types of financing models such as pledge financing for multiple types of inventory portfolios have been derived,which has made the inventory pledge financing market more complicated and the probability of potential risk explosion has also been substantial improve.The traditional research methods used to measure the inventory pledge financing still remain in the market risk of single item inventory pledge financing,which obviously deviates from the actual situation.Therefore,from the perspective of banks and other supply chain financial institutions,this article takes the mainstream tradingcommodity varieties in the commodity trading market as the research object,and selects a total of 849 trading days from January 4,2016 to June 28,2019.The price is used as research data,and the La-VaR model is used to fully consider the impact of market price fluctuations and liquidity factors of inventory varieties,at 95% and 99%confidence levels and 1 day,1 week,1 month,3 months and Under the restriction of 5different pledge periods of 6 months,a more comprehensive quantitative study on the potential risks of the pledge financing model of the inventory portfolio.Through empirical research on the risk of inventory portfolio pledge financing,main conclusions of the paper are as follows,(1)The La-VaR model with added liquidity indicators can measure liquidity risk well and evaluate the risk of the inventory pledge financing model more comprehensively.(2)The effect of market price fluctuations has significantly increased with the increase of the pledge time span;while the impact of liquidity risk always exists,it is no longer the main risk.(3)When a negatively correlated inventory portfolio is used for pledge,the risk of the portfolio is significantly less than the risk value of the inventory of each single species when pledged.(4)Small and medium-sized enterprises adopt a negative portfolio inventory pledge financing strategy.Compared to using only a single type of inventory pledge,more funds can be obtained when the total value of the pledge is the same,and the risks borne by banks and other financial institutions It has not increased.Based on the conclusions of the research,the following recommendations for preventing risks related to inventory pledge financing are proposed.(1)Promote the implementation of the inventory pledge financing contract classification system.(2)Strengthen the innovation of inventory pledge financing model.(3)Choose pledges carefully.(4)Improve the regulatory measures for inventory pledge financing.