Digital platforms make it easier to manage cash flows and enhance business operations.
October 04, 2023
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Historically, smaller, lower-tier suppliers have had trouble obtaining financing. New fintech platforms are changing that. They are making it easier for them to use assets such as approved invoices, inventories, and purchase orders to access financing from outside investors or focal companies.
Small and medium-sized enterprises (SMEs) deeper in the supply chain often find themselves with many financial challenges. They are several layers away from giant focal companies like Unilever, Siemens, and Dell that can provide supply chain financing. Until now, all support programs that focal companies have provided, such as reverse factoring and dynamic discounting, were only available to their first-tier suppliers.
Thomas Y. Choi is professor of supply chain management at Arizona State University’s W. P. Carey School of Business. He is co-director of Complex Adaptive Supply Networks Research Accelerator (CASN-RA). His most recent book is The Nature of Supply Networks (Oxford University Press, 2023).
Sam Bizri is founder and CEO of Zeconomy, a fintech company that provides supply chain and blockchain-based solutions. He previously founded Codehost, a provider of print solutions.
Wenting Li is a PhD candidate in supply chain management at Arizona State University’s W.P. Carey School of Business. He previously was a fintech entrepreneur who provided financial services to cashmere herdsmen.
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