The financial supply chain needs more attention than it usually gets. Traditionally, the focus of supply chain management is on the movement of finished goods and raw materials across the value chain. But companies also need to pay attention to the flow of money. The movement of money happens in the form of bank credits or with the help of other financial institutions. Often these methods do not work well for medium to small suppliers who frequently are cash constrained and need to free up their working capital more quickly. There are solutions available in the market to facilitate credit retrieval, but banks are financing the receivables of small suppliers, which involves risk and requires the banks to investigate the relationships between buyers and the suppliers (their customers) in those chains. This drives up the fees paid by small suppliers. Another major issue with small and medium enterprises in emerging regions is the cost of capital.
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