What is the chain financing process?
The government intends to reduce the cost of products as well as the non-current receivables of banks by using the chain financing plan, in line with the recent memorandum of understanding entitled “Production Chain Financing” with a follow-up. Ministry of Silence Between this ministry and the Ministry of Economic Affairs and Finance, central bank And seven operating banks were signed.
According to reports Tasnim News AgencyThe strategic report of the chain financing published by the Office of Strategic Studies of Production Prosperity of Imam Sadegh University is as follows:
In the economic program of the thirteenth government, special attention has been paid to the use of new methods of financing and solving the problems of economic enterprises.
The government intends to use the Chain Financing Plan to help the Iranian economy withstand the pressures of international sanctions, so that by implementing this plan, the government will use credit instruments instead of focusing solely on liquidity.
One of the important goals of the plan is to direct the activities of banks towards productive activities and in fact credits towards production. The government intends to use the plan to reduce the cost of products as well as non-current receivables of banks. Ministry of Silence Between this ministry and the Ministry of Economic Affairs and Finance, central bank And seven operating banks were signed.
In this regard, a report on the principles, concepts and applications of chain financing has been prepared by researchers in the Office of Strategic Studies of Production Prosperity, which is summarized below:
Supply Chain Financing (Chain Financing)
Supply Chain Financing (SCF) is a creative approach that companies use to allocate financial resources and optimize financial flows in the supply chain. This approach reduces costs, increases profitability and efficiency of the organization as much as possible, and by providing options for payments, optimizes liquidity in the network.
The overall supply chain financing process
The supply chain financial management platform includes several key components such as banks, suppliers and buyers. The following is the overall supply chain financing ecosystem:
Providing cash flows in enterprises
Chain financing models optimize working capital by optimizing working capital through the management of three components of accounts payable, accounts receivable and inventory, and allow companies in a supply chain to access financial resources at a lower cost and faster. The main advantage of implementing this plan is the reduction of required liquidity and the release of a large amount of capital involved, which leads to greater return on investment and maximize shareholder profits.
Benefits of Chain Financing Scheme
The following is a summary of some of the benefits of this plan:
- Accelerate and improve the process of financing working capital of manufacturing enterprises
- Reduce the need to receive new facilities to finance working capital
- Reduction of non-current receivables of banks
- Reduce resource diversion and increase resource allocation efficiency (financial resources, production inputs, etc.)
- Increase the transparency and controllability of the financial flow of the economy
- Reducing rent distribution areas and eliminating intermediaries in supply and distribution chains
- Reduce the cost of the product and increase consumer welfare
- Reduce market fluctuations (prices and production)
- Increase the productivity and profitability of the firm and ultimately the entire industry
- Laying the groundwork for reform support policies
- Laying the groundwork for reforming the banking system
- Increase the efficiency and transparency of the tax system
In the current era, corporate executives are under increasing pressure to reduce operating costs and costs due to limited financial resources and tight competition. But the implementation of new financing methods requires the help of the government and related financial institutions. The thirteenth government By concluding agreements in recent months, it has shown that it has a serious intention to solve the financial problems of economic enterprises. Special attention to the implementation of these plans will enable businesses to manage and optimize the flow of liquidity and working capital throughout the supply chain, which will promise prosperity and economic growth in the future.