The booming supply chain finance is ushering in new regulations.
On September 22, the People's Bank of China, the Ministry of Industry and Information Technology, the Ministry of Justice, the Ministry of Commerce, the State-owned Assets Supervision and Administration Commission, the State Administration for Market Regulation, the China Banking and Insurance Regulatory Commission, and the State Administration of Foreign Exchange issued the "On Regulating the Development of Supply Chain Financial Support Supply" Opinions on the Stable Cycle and Optimization and Upgrading of the Chain Industrial Chain" (Yinfa [2020] No. 226, referred to as Document No. 226).
In recent years, the growth rate of my country’s accounts receivable has been significantly higher than the economic growth rate, and the turnover rate of accounts receivable has continued to decline. There is a need for the development of supply chain finance.
Document No. 226 puts forward 23 policy requirements and measures for supply chain finance. Different from the past, the definition of "supply chain finance" in this article states that it is "in the context of real transactions."
That is, supply chain finance refers to starting from the overall supply chain industry chain, using financial technology means to integrate logistics, capital flow, information flow and other information, and taking the lead in building a supply chain in the context of real transactions. The financial supply system and risk assessment system integrated between core enterprises and upstream and downstream enterprises provides systematic financial solutions to quickly respond to the comprehensive needs of enterprises in the industry chain such as settlement, financing, and financial management, reduce enterprise costs, and improve value of all parties in the industrial chain.
At present, participating institutions in supply chain finance include commercial banks, Internet institutions, various industrial companies, etc. "The state's supervision of supply chain finance has not been relaxed, but the supply chain finance market has innovated too fast, and some places have introduced some encouraging and supporting policies. Document No. 226 still puts the regulatory power on traditional banks and core enterprises and other institutions." 1 A person from an organization in South China said.
Industrial chain repair and reconstruction
In my country, supply chain finance has developed several iterations. In 2008, supply chain finance broke out in industries such as automobiles, energy, steel, and nonferrous metals. But by 2012, after the Shanghai steel trade crisis broke out, supply chain finance entered a trough. After 2017, a large number of centrally-owned factoring companies were established. By 2019, supply chain finance will usher in an explosive period of policy dividends.
But at the same time, in July 2019, Noah Wealth stepped on Chengguang International’s 3.4 billion yuan supply chain financing, triggering the industry’s thinking on “pseudo supply chain finance” and its attitude towards supply chain finance. Begin to differentiate.
In Document No. 226, prevention of "risks" has been emphasized many times, and many requirements have been proposed "under the premise that risks are controllable."
Document No. 226 requires financial institutions, core enterprises, government departments, third-party professional institutions and other parties to strengthen information sharing, and rely on core enterprises to build upstream and downstream integrated, digital, and intelligent Information system, credit assessment and risk management system, dynamically grasp the operating status of small, medium and micro enterprises, and establish a more stable and close relationship between financial institutions and real enterprises. Encourage banks and other financial institutions to provide systematic and comprehensive solutions for settlement, financing and financial management for the industrial chain to improve the integrity and synergy of financial services.
Under the conditions of clear visibility of supply chain transaction information and controllable cash flow and risks, banks can carry out online pre-loan, loan and post-loan "financing pilot" for upstream enterprises in the supply chain. Three checks." Support exploring the use of electronic signatures to sign contracts online, conduct identity authentication verification, and remote video signing verification. Support inter-bank electronic certification interoperability and mutual recognition.
In the key "rights confirmation" part of supply chain finance, Document No. 226 requires core enterprises to be encouraged to confirm rights through accounts receivable financing service platforms to facilitate accounts receivable financing for small, medium and micro enterprises. , reduce the costs of small, medium and micro enterprises. Banks and other financial institutions should actively connect with accounts receivable financing service platforms to reduce the time and cost of confirming accounts receivable and support efficient financing for small, medium and micro enterprises.
Standardize the development of supply chain inventory, warehouse receipts and order financing. On the premise of real transaction background and controllable risks, financial institutions can select movable assets with strong liquidity and sound value and price systems to carry out inventory and warehouse receipt financing.
Financial institutions should effectively apply scientific and technological means to improve risk control levels, achieve information interconnection and interoperability with core enterprises and management systems in warehousing, logistics, transportation and other links, and promptly verify the authenticity and validity of inventories, warehouse receipts, and orders.
It is worth noting that Document No. 226 states that “promoting the repair, reconstruction, optimization and upgrading of the industrial chain” and “supporting the opening up and repair of the global industrial chain”.
Specifically, supply chain finance should serve the integrity and stability of the supply chain industry chain as its starting point and purpose, adapt to changes in industrial organization forms, accelerate innovation and standardized development, and promote the repair, reconstruction, optimization and upgrading of the industrial chain. Increase support for the national strategic layout and key areas, give full play to the decisive role of the market in resource allocation, and promote economic structural adjustment.
In addition, the document also supports opening up and repairing the global industrial chain. Financial institutions should improve the level of financial services for enterprises in the international industrial chain, make full use of the linkage between domestic and overseas branches to support the construction of foreign trade transformation and upgrading bases, develop diversified markets, transfer export products to domestic sales, and transfer processing trade to the central and western regions, etc., to support export enterprises and overseas Partners have resumed business exchanges, supported export enterprises in accepting orders and fulfilling contracts by providing buyer credit, export accounts receivable financing, insurance policy financing, etc., and made good use of export credit insurance to share risks and losses.
Previously in 2017, the General Office of the State Council issued the "Guiding Opinions on Actively Promoting Supply Chain Innovation and Application", encouraging commercial banks and core supply chain enterprises to establish supply chain financial service platforms to provide upstream and downstream supply chain services. Provide efficient and convenient financing channels for small, medium and micro enterprises. Encourage core supply chain enterprises and financial institutions to connect with the accounts receivable financing service platform built by the Credit Information Center of the People's Bank of China, and develop supply chain financial models such as online accounts receivable financing.
Strictly control false transactions and repeated financing
It is worth noting that Document No. 226 points out the need to guard against a number of risks in supply chain finance.
Circular No. 226 points out that core enterprises are not allowed to deliberately occupy the accounts of upstream and downstream enterprises while earning interest by providing accounts receivable financing through affiliated institutions. The circulation of accounts payable on various supply chain financial service platforms should use legal and compliant financial instruments, and no closed loops or restrictions on financing service providers are allowed. If core enterprises and third-party supply chain platform companies squeeze out the interests of small, medium and micro enterprises in the name of supply chain finance, relevant departments should correct their mistakes in a timely manner.
Many industry insiders pointed out that there are indeed some core enterprises in the supply chain at the business level. On the one hand, they lengthen the account period of upstream and downstream small and medium-sized enterprises and occupy funds in disguise; on the other hand, they set up factoring companies outside the body. , small loan companies, finance companies and other entities package accounts payable into factoring assets for financing.
"Extending the accounting period" refers to core enterprises, but some people in the supply chain industry said that in addition to obtaining supply chain financial profits within the original accounting period, core enterprises can also obtain additional updates by extending the accounting period. Much profit. As long as the supplier compares with other financing channels, the cost is lower, the efficiency is higher, the procedures are simpler, and it is more suitable for them, they will adopt the financing channel of supply chain finance in cooperation with core enterprises.
Macro data show that the current accounts receivable period is still lengthening. Data from the National Bureau of Statistics show that from January to July, the total profit of industrial enterprises above designated size nationwide was 3.10229 billion yuan, a year-on-year decrease of 8.1%. As of the end of July, the accounts receivable of industrial enterprises above designated size nationwide were 15.59 trillion yuan, a year-on-year increase of 14.0%. The average collection period of accounts receivable was 56.0 days, an increase of 8.4 days year-on-year.
Zhu Hong, senior statistician of the Industrial Department of the National Bureau of Statistics, previously interpreted that although the profit growth of industrial enterprises further accelerated in July, the cumulative profit decline in the upstream mining industry and raw material industry was still large, and accounts receivable increased. The increase compared with June has caused greater pressure on corporate cash flow. Coupled with the complex and severe domestic and international environment, there is still some uncertainty in future profit growth.
Document No. 226 requires that false transactions and repeated financing risks be strictly prevented and controlled. Banks and other financial institutions must strictly review the authenticity of supply chain financing transactions and be wary of inflated increases, fictitious accounts receivable, inventory, and repeated mortgages and pledges.
For asset securitization and asset management products with accounts receivable as underlying assets, underwriters and asset managers should effectively perform due diligence and necessary risk control procedures, and strengthen requirements for information disclosure and investor suitability.
At the same time, "unlicensed" companies are not allowed to carry out supply chain finance. Document No. 226 requires that supply chain financial services must strictly abide by national macro-control and industrial policies, and various supply chain financial products must not be used to circumvent national macro-control requirements. All types of factoring companies, small loan companies, and finance companies that carry out supply chain finance business must strictly abide by the business scope, strengthen business compliance and risk management, and must not carry out financial services without a license or beyond the business scope stated in the license. business. Various third-party supply chain platform companies are not allowed to carry out financial business in disguised form in the name of supply chain finance, and are not allowed to charge service fees that are inconsistent with quality and price from small, medium and micro enterprises in the name of supply chain finance.