Author: Firebird Finance
In the past two years, the State Council and various ministries and commissions have launched a series of measures to increase support for small, medium and micro enterprises, focusing on the difficulty and expensive financing of SMEs. According to data from the National Bureau of Statistics, as of the end of November 2019, the bills receivables and accounts receivable of industrial enterprises above designated size were 17.92 trillion yuan. How to make these bills easily and efficiently circulate and reduce the financing obstacles or high transaction costs caused by information asymmetry to small and micro enterprises? In such a multi-party participation and lack of trust scenario, what kind of breakthrough will the blockchain bring?
In the third phase of the column, we walked into Zhejiang Commercial Bank and learned about the "blockchain +" breakthrough to solve the supply chain financial problems.
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At present, the competition between a single enterprise is transforming into competition between supply chains, and the interdependence among the parties in the same supply chain is deepening. In reality, upstream companies generally have financing needs but often do not have the ability to mortgage and guarantee, so they face the dilemma of corporate funds shortage and extended account period. In 2017, Zheshang Bank launched a receivables chain platform based on blockchain technology to integrate the core Corporate credit transfer, small enterprises in the chain can obtain low-cost and efficient financing.
Applying blockchain technology, giving full play to the technical characteristics of decentralization, non-tampering, high security and smart contracts, the receivables generated by real enterprises based on real transactions can be converted into digital assets in the form of "on-chain". Transform accounts receivables based on basic transactions between supply chain core enterprises and upstream and downstream enterprises into "blockchain receivables". Depending on the core credit of the core enterprise or bank credit, these blockchain financial instruments can be used in business circles. Close the circulation, open up the upstream and downstream of the industrial chain, and reduce the financing cost of the industrial chain.
The "receivables generated by real transactions are converted into digital assets in the form of" on-chain "", and the digital registration of blockchain digital assets is also realized. Enterprises no longer need to go through various procedures offline. Transaction contracts, transaction certificates, and other image files are electronically signed by the transaction parties and stored on the blockchain, reducing the risk of fraud, false transactions, and repeated financing. The smart contract technology of the blockchain can also add the rules of the supply chain business to the blockchain assets, realizing the intelligent automatic fulfillment of business rules, effectively preventing human intervention, improving operational efficiency, and reducing operational risks and costs.
"Blockchain +" supply chain finance solves three pain points: one is authenticity. It is difficult to distinguish the authenticity of the accounts receivable of small enterprises, and the core enterprises have issued acceptances on the receivables chain platform. The second is confirmation of power. Enterprises in the supply chain use blockchain technology to verify on the receivables chain platform. As long as small companies hold it, their rights are clear, and no core company needs to confirm the rights. The third is lock-in. On the accounts receivable platform, after the core company's funds are received, it will automatically be fulfilled to small businesses.
For core companies, no need to provide funds, only credit can be used to extend the account period and slow down the outflow of funds; at the same time, enhance the competitiveness of the supply chain in which they are located, and build a healthy ecology; and fulfill their social responsibilities to assist the supply chain. Of SMEs get funding. Small businesses can improve their financing efficiency and reduce their costs, so they can run their businesses better. And financial institutions will further cooperate with core enterprises to serve their upstream and downstream enterprises to gain more customers. At the same time, the online operation process has also greatly reduced the human and material input of all parties.
As of the end of November 2019, Zheshang Bank had activated supplier receivables for more than 2,700 core enterprises, with a total amount of more than 240 billion yuan, covering more than 15,000 upstream and downstream enterprises.
Blockchain + supply chain finance has achieved remarkable results, but the application of new technologies requires a process of exploration. How to further develop and build an industry application alliance, explore inter-industry business cooperation, and open up a new model of inter-industry business cooperation need to be further improved.