PUBLISHER: The Business Research Company | PRODUCT CODE: 1543840
PUBLISHER: The Business Research Company | PRODUCT CODE: 1543840
Supply chain finance (SCF) refers to a set of technology-based solutions that enhance cash flow by allowing businesses to lengthen their payment terms to their suppliers while providing the option for suppliers to get paid early.
The supply chain finance market consists of sales, by entities (such as organizations, sole traders or partnerships) of supply chain finances that are used by organizations involved in global trade, including manufacturers, distributors and retailers, to optimize working capital and reduce supply chain risks. The users of SCF include a wide range of businesses from various industries, such as automotive, electronics, food and beverages and pharmaceuticals. It is commonly utilized when companies seek to improve liquidity and maintain strong supplier relationships.
The global supply chain finance market was valued at $7,840.00 million in 2018 which grew till 2023 at a compound annual growth rate (CAGR) of more than 8.00%.
Significant Presence Of Small And Medium-Sized Enterprises (SMEs)
During the historic period, significant presence of small and medium-sized enterprises (SMEs) drove the growth of the supply chain finance market. SMEs often struggle with traditional financing due to their limited credit history and collateral. Supply chain finance offers alternative funding, improving cash flow management through invoice discounting and factoring. It also mitigates risks associated with trade, ensuring timely payments and reducing financial uncertainty, thereby supporting SMEs' growth and operational stability. For instance, according to India Briefing, an India-based business news and guide publishing company, as of June 2023, the Udyam portal registered 20.09 million micro, small & medium enterprises (MSMEs), comprising 19.4 million micro-enterprises, 554,000 small enterprises and approximately 52,000 medium-sized enterprises. Micro, small and medium enterprises (MSMEs), which account for 27% of India's GDP, are crucial to the economy. Additionally, in July 2022, according to the Small Business Administration, small businesses in the United States constituted 99.9% of all operational companies, totaling approximately 30.7 million enterprises in 2021. This substantial figure underscores their significant contribution to job creation, with these businesses generating around 1.5 million new jobs annually, representing about 64% of the total new jobs in the US. Therefore, significant presence of small and medium-sized enterprises (SMEs) positively impacted the growth of the supply chain finance market during the historic period.
Strategic Partnerships And Collaborations Among Major Players To Expand Its Product Range
Major companies in the supply chain finance market are focusing on collaborations and partnerships to strengthen their market position, enhance product offerings and expand their geographic reach. Through these partnerships and collaborations, companies can take advantage of emerging technologies, integrate complementary skills and reach emerging markets. For instance, in February 2024, Credit Agricole Corporate and Investment Bank (CIB) partnered with Demica, a UK-based fintech company, to launch a new receivables and supply chain finance (RSF) solution. This collaboration aims to enhance financing options and improve cash flow management for businesses by leveraging Demica's innovative technology and Credit Agricole CIB's extensive financial expertise.
The global supply chain finance market is highly fragmented, with a large number of small players in the market. The top ten competitors in the market made up to 4.87% of the total market in 2023.
Supply Chain Finance Global Market Opportunities And Strategies To 2033 from The Business Research Company provides the strategists; marketers and senior management with the critical information they need to assess the global supply chain finance market as it emerges from the COVID-19 shut down.
Where is the largest and fastest-growing market for supply chain finance? How does the market relate to the overall economy; demography and other similar markets? What forces will shape the market going forward? The supply chain finance market global report from The Business Research Company answers all these questions and many more.
The report covers market characteristics; size and growth; segmentation; regional and country breakdowns; competitive landscape; market shares; trends and strategies for this market. It traces the market's history and forecasts market growth by geography. It places the market within the context of the wider supply chain finance market; and compares it with other markets.