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Forging New Links?

As relationship business lending by banks continues to contract in many parts of the world, companies are looking for alternative financing tools. Particularly hard hit have been SMEs, even in rapid growth BRIC economies, who find it difficult to raise affordable credit. Larger corporations, sitting at the head of supply chains, while largely untouched by the credit squeeze, are concerned about volatility in their supply chains. They wish to avoid disruption resulting from financial difficulties amongst essential suppliers.

As a result, recent years have witnessed a rise in the take-up of Supply Chain Finance (SCF) schemes, where larger corporations with access to more liquidity than they need seek to pass that benefit through to their smaller suppliers.

Key Points

  • Current growth rates
  • Predicted SCF growth
  • Drivers of growth
  • Banks’ positioning of SCF in the trade finance spectrum
  • Promoting SCF
  • Challenges for implementing cross- border SCF programmes
  • Understanding the interest rate arbitrage
  • Government and regulatory influences on SCF
  • Corporates’ view of SCF
  • Suppliers and Implementation

 

Written by

Phillip Kerle
Chief Executive Officer
Demica

Financial Supply Chain Series (7 articles)

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