1. Background
Recently, due to work, I came into contact with the blockchain + supply chain financial industry. This article mainly starts from the concept and business logic, and briefly introduces the essence of blockchain + supply chain finance and the chemical reactions produced together.
2. Supply chain finance
2.1 Traditional Supply Chain Finance
Supply Chain Finance (Supply Chain Finance), referred to as SCF. To put it simply, it is to provide financial services for upstream and downstream enterprises of a certain industrial chain around the core enterprise, relying on the credit of the core enterprise, and taking real transactions as the background.
The essence of the birth of supply chain finance is due to the financing difficulties of many small and medium-sized enterprises with insufficient qualifications. Traditional supply chain finance is a financing model in which banks connect core enterprises with upstream and downstream enterprises to provide flexible financial products and services. Benefiting from the continuous development of accounts receivable, commercial paper, and financial leasing markets, supply chain finance has developed rapidly.
2.2 Blockchain + supply chain finance
The traditional supply chain finance is a centralized model. Basically, financial institutions and factoring companies rely on a core enterprise to provide financing, lending and other financial services for small and medium-sized enterprises in the supply chain. Information opacity not only affects the efficiency of the entire chain, but is also not conducive to building a credit system for the supply chain.
Blockchain is inherently decentralized, open and transparent. To a certain extent, it can accumulate the credit of small and medium-sized enterprises, and objectively reflect the operating conditions of enterprises, and make lending policies at low cost and high efficiency. I personally think that supply chain finance is the best application scenario for the current blockchain technology.
The following are transaction scenarios in which suppliers, core enterprises, banks, and financial institutions coexist, which are the most suitable application scenarios for blockchain. It plays a role in facilitating the confirmation of assets such as accounts receivable and real estate, reducing intermediate links, leaving data deposit certificates, preventing fraudulent bills, and preventing repeated pledges.
3. Business logic and application scenarios of accounts receivable finance
We mentioned earlier that benefiting from the continuous development of accounts receivable, commercial paper, and financial leasing markets, supply chain finance has developed rapidly.
3.1 What is accounts receivable
Accounts receivable refers to the amount that an enterprise should collect from the purchaser due to the sale of goods, products, and provision of labor services in the normal course of business. Next, let’s talk about the financial business and application scenarios of accounts receivable.
3.2 Accounts Receivable Financing
The account receivable financing model mainly refers to the upstream enterprise applying to the supply chain enterprise to use the account receivable as the source of repayment based on the accounts receivable generated by the real contract (credit sales) signed with the downstream enterprise in order to obtain funds. financing. Simply, it can be understood that upstream enterprises use accounts receivable as collateral certificates to initiate lending services to financial institutions or banks. The business logic and application scenarios are as shown in the figure below.
Accounts receivable financing is a relatively common financing method in traditional trade financing and supply chain trade. Banks are usually used as the main financial platform, but in supply chain trade business, supply chain trade companies After obtaining the relevant qualifications of a factoring company, it can also act as a factoring company. The receivables financing method provided is more efficient and professional for small and medium-sized enterprises. The link is more familiar, and at the same time, it is more targeted in terms of risk control.
4. Blockchain realizes supply chain accounts receivable finance
The blockchain realizes the accounts receivable problem of the supply chain, and the ultimate realization is the ability of asset penetration. That is to say, the credit account in the hands of small and medium-sized enterprises can be used as a certificate to achieve the purpose of gaining the trust of banks or institutions. The general process is as follows.
As much as possible, business data can be uploaded to the chain. In order to achieve open data trust, simplify the process, reduce the credit risk of the counterparty, and improve transparency and monitoring efficiency
5. The general structure of blockchain + supply chain accounts receivable financial application
- The top layer is the ToB user interface, which is used by all enterprise users and banking institutions in the supply chain
- The middle layer is a smart contract, which is used to implement the business logic described above
- The background is used to scan contract data on the chain and provide a read-write interface for centralized data, and provide corresponding APIs to third-party organizations (if necessary)
