Standard Chartered Bank (China) Limited delivered a new supplier finance solution, namely, Deep Tier Supplier Finance. It enables finance support extended to upstream suppliers across anchor’s whole procurement chain, based on anchor’s irrevocable payment obligation under accepted invoice being digitized, split, transferred among tier suppliers within the specific digital platform. It offers better control of supply chain, high flexibility of financing and greater coverage across the entire supplier network.
In the past year, Standard Chartered China has supported the financing needs of nearly 200 suppliers, including direct supplier and deep tier suppliers of anchor buyers.
- Anchor, as user of the Digital Platform, issues Digitized Payment Obligation (“Digipo”) backed by accepted invoice with underlying commercial transaction between anchor and Tier 1 supplier
- The supplier holding a Digipo has 3 options:
a. Cash out - Present to Standard Chartered Bank through the Digital Platform for prepayment at a pre-agreed discounting rate
b. Pass on - Endorse/transfer partially or fully to the next level supplier as a means of payment
c. Hold to maturity - at which time holders will be paid the related value by anchor
- Digipo is maintained and monitored on a blockchain or other secured technology enabled Platform
- Anchor is contractually obliged to pay the Digipo holder, including Sn supplier and/or bank who is the owner of Digipo
- Reduce funding cost – Extend financial support to direct supplier and upstream suppliers
- Improve supplier management – Greater visibility into end-to-end supply chain
- Optimise balance sheet – Stable funding sources to increase capital turnover and operational efficiency
- Convenient – Benefits deep tier supplier with efficient and convenience service, i.e. half day registration of new supplier, half an hour complete the payment
- Eliminate fraud – leverage blockchain or other technology to prevent forgery / fraud
For more information, please contact your relationship manager, transaction banking sales consultant, or visit sc.com/cn
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