Whys is SCF? Supply Chain Finance empowering SME

@shoant
09 Jun, 2021

Share this

Supply chain finance (SCF) is a term describing a set of technology-based solutions that aim to lower financing costs and improve business efficiency for buyers and sellers linked in a sales transaction. SCF methodologies work by automating transactions and tracking invoice approval and settlement processes, from initiation to completion. Under this paradigm, buyers agree to approve their suppliers' invoices for financing by a bank or other outside financier--often referred to as "factors." And by providing short-term credit that optimizes working capital and provides liquidity to both parties, SCF offers distinct advantages to all participants. While suppliers gain quicker access to money they are owed, buyers get more time to pay off their balances. On either side of the equation, the parties can use the cash on hand for other projects to keep their respective operations running smoothy.


With retailers remaining focused on growth, “emerging markets” are the source of the fastest revenue growth. Global expansion is particularly important for home improvement retailers as large established domestic markets have less room for growth and consumers are highly sensitive to pricing. Therefore, retailers are eager to capture a growing middle class and young population of shoppers in Latin America, Asia, Eastern Europe, Africa and Middle East. In 2011, retail revenue growth was only 3.4 percent in the EU and 6.3 percent in the U.S., compared to 29 percent in Africa/Middle East and 21.3 percent in Latin America.


The current economic climate is compelling companies to manage liquidity better and strengthen their balance sheet.

This has increased the challenge for businesses to remain financially sustainable. 

According to PwC's recent Global Working Capital Study 2018/2019, RM6.0 trillion (€1.3 trillion) of cash opportunity could be released by addressing poor working capital management practices. Our analysis for Malaysian businesses indicates an opportunity worth RM110 billion.

Supply Chain Finance (SCF) can be a solution for companies looking at improving their working capital and cash flow position.

You will be interested

6 things I just found out about BTS ! Too old for K-Pop

they have rocketed to the Billboard Music Awards(BBMA), the American Music Awards and even the cover of Time Magazine.
itsme in ShoutOut 11 months ago

Why Some Women Get *in the Mood* Right Before Their Period

Do you feel horny, child? Isn’t that right? Do you feel randy?
Writer Perception in ShoutOut 11 months ago