One of China’s big state-owned banks has teamed up with a leading supply chain finance platform to develop new fintech innovations.
Agricultural Bank of China (ABC) executed a bank-enterprise strategic cooperative agreement with Zhongqi Yunlian (中企云链) (CSCC) on 8 May in Beijing, while also promoting its new “Factoring E-Rong” (保理e融) supply chain financing product.
CSCC bills itself as an internet-based supply chain financial services platform that was created via collaboration between multiple large-scale state-owned enterprises (SOE), with the goal of “fully employing the core functions of large-scale SOE’s in industry chains to comprehensively service all economic entities on industry chains.”
ABC and CSCC hope to create a supply chain credit management system that is based on China’s “Internet Plus” concept and makes use of CSCC’s electronic payments yunxin (云信) letter of commitment, in order to better support small and medium-sized enterprises as well as provide comprehensive “one-stop” online services to supply chain customers.
ABC’s “Factoring E-Rong” product was launched on 9 April, targeting micro and small enterprises that are unable to rapidly convert their accounts receivable, as well as deal with the inability of banks to cover the financing needs of full supply chains.
Factoring E-Rong reportedly seeks to provide financing to the upstream suppliers of core enterprises by using computer technology to gather together the accounts receivables of these core enterprises and assess their independent payment sources based on real transactions.
ABC hopes the product will help to drive financial inclusion for micro and small-enterprises by reducing the dependence of traditional lending models on financial reports and collateral.
The product has already been deployed in the provinces of Shanxi, Sichuan, Shandong, Shaanxi and Hunan, and provided financing services to leading enterprises including CRRC Datong, CRRC Chengdu and China Railway No. 10 Engineering Group.