Bank Credit Financing Research Articles

Design of Blockchain and Strategic Financing Service under the Platform Economy

The capital constrains and uncertainties in supply disruptions faced by small and medium-sized suppliers pose critical challenges for the development of e-commerce platforms. In response, platforms have begun offering direct financing (PDF) to their suppliers alongside traditional bank credit financing (BCF). Within the private (consortium) blockchain, the platform and the supplier (and the bank) achieve consensus on financial smart contract, enabling the execution of flexible contracts tailored to suppliers’ risk profile. We develop a game-theoretic model to examine the terms of smart contracts in different blockchains and further investigate the platform's optimal blockchain design. We find that PDF serves to safeguard the platform's commission income from high-interest BCF. Our analysis reveals that PDF is more likely to be provided to a risky supplier within the consortium blockchain, contrasting with outcomes observed within the private blockchain. As a result, the platform and the supplier could reach win-win, or win-lose outcomes within the private blockchain; while within the consortium blockchain, they tend to result in win-win or lose-win outcomes. Such incentive conflict could potentially hinder blockchain adoption. Our findings further provide the managerial insights guiding the platform's blockchain design: adopting consortium blockchain under moderate market potential and low or high supplier's risk, and adopting private blockchain otherwise. Furthermore, we consider the supplier's endogenous effort on reducing risk, and numerically demonstrate that blockchain may encourage or discourage the supplier's effort. Our research complements previous studies by investigating the interaction between the PDF provision and blockchain structures under uncertain supply disruption risk.

Impact of Development Bank’s Credit Financing on Small and Medium-Scale Enterprises Performance

This study examined the impact of Development Bank Credit Financing (DBCF) on the performance of small and medium enterprises, employment generation growth, financial asset growth and profit growth in Nigeria. A survey research design was employed; 398 SMEs were randomly selected from the beneficiaries of DBCF loans. Descriptive analysis was conducted, and binary logistic regression was employed to examine the impact of DBFC on SMEs. The result showed that the DBCF Amount of Credit Loan Received (ACLR) positively impacted the growth of SMEs, given their beta coefficients of 0.510 and 0.765, respectively. Their respective p-values and Wald statistics of 0.001, 0.001 and 14.050, 13.486 show their significance level. However, it was discovered that there is no significant impact of DBCF on the profit growth of SMEs in Nigeria. The average monthly tax payment (AVMTL) made by the micro, small and medium enterprises (MSMEs) was established to negatively impact on SMEs profit. The coefficient (β) = - 1.004 (100.4%) showed that a unit change in the AVMTL while holding other variables constant led to about 1.004 unit decline in the logit, SMEs profit. Specifically, it means MSMEs profit will decrease by the exact amount of what is paid as tax.

Impact of Capital Position and Financing Strategies on Encroachment in Supply Chain Dynamics

Channel encroachment and financing decisions are prevalent in practice. Utilizing the Stackelberg game framework, we investigate the impact of a retailer’s capital position and financing strategies on supply chain dynamics in which a supplier considers establishing a direct sales channel. We find that the retailer’s equilibrium financing strategy is impacted by demand volatility and the initial working capital. The supplier’s encroachment decision hinges on the entry cost when neither trade credit financing nor bank credit financing is available. When both types of credit are available, the choice of financing is a complex interplay involving initial working capital, entry cost, and demand volatility. Notably, the supplier’s decision to encroach may shift from a binary stance of either encroaching or not encroaching, or it may oscillate from encroachment to non-encroachment and back to encroachment, particularly with an increase in demand volatility when the entry cost is moderate. The novelty of this study lies in its integration of supplier channel decisions with retailer operational decisions and financing strategies, examining how the capital position and financing strategies impact channel decisions. This study provides managerial insights into the interplay between supplier’s channel dynamics and retailer’s financial considerations, shedding light on unexplored aspects of channel management. In future studies, some assumptions in this study can be modified to obtain more managerial insights.

Motivation's Influence on Credit Decisions: Unveiling the Moderating Effect of Brand Awareness in PT Bank Syariah Indonesia Tebing Tinggi Branch

The number of MSMEs in Indonesia is very large, but the portion of credit financing to MSMEs is still very small when compared to the percentage of the number of MSMEs. Therefore, this study aims to analyze the effect of MSME customer motivation on credit decisions at PT Bank Syariah Indonesia through brand awareness as a moderating variable. This research is a quantitative descriptive study conducted on 250 MSME customers of PT Bank Syariah Indonesia, who have credit with current status and are willing to be respondents. Sampling method with accidental sampling. This study uses primary data collected by questionnaires distributed to respondents. Respondents' perceptions were measured using a Likert scale. Research with SEM model, data processing with PLS 3.0 smart software. The results showed that motivation and brand awareness has a significant effect on MSME customer credit decisions at PT Bank Syariah Indonesia Tebing Tinggi branch. Brand awareness can be a moderating variable in the influence of motivation on credit decisions of MSME customers of PT Bank Syariah Indonesia Tebing Tinggi Branch. The implication of this research is targeting the policy of increasing Islamic bank credit financing that is oriented towards brand awareness.

Impact of Development Bank Credit Financing on Growth of SMEs in Nigeria

Over the years, small and medium enterprises (SMEs) have been considered as engines of growth. This has indeed been observed from available survey data from the World Bank and other development institutions. Access to finance has been recognized as a major factor affecting the growth and success of SMEs all over the world. Small and medium enterprises (SMEs) financial constraints limit their investment opportunity and stagnant growth. Therefore, a quest to find a solution to this necessitated the establishment of Development Banks which is saddled with the responsibility of making credit available to SMEs. Hence, the main objective of this study is to examine the impact of Development Bank credit financing on the growth of SMEs. A Survey research design was employed, 398 SMEs were randomly selected from the beneficiaries of Development Bank of Nigeria (DBN) loans. Binary logistic regression was employed to test the stated hypothesis. The estimated logistic regression showed that variables such as (HSBC) which is an increase in sales of the MSMEs and support and service training for SMEs before loans impacted positively and significantly on the profitability of the SMEs given their beta coefficients of (β)=0.570, 0.384 respectively. Their level of significance is shown by their respective p-values and Wald statistics of 0.049, 0.099, 3.889, and 2.7240. These show that the variables are barely significant at 10%. However, all the other variables such as the age of the entrepreneur (AGE), gender of the entrepreneur (GENDER), amount of loan received (AOLR), and proportion of loan utilized (POLU) do not have a significant impact on the profit of the entrepreneurs.

Corporate Utilization of Bank Credit Financing Advantages under Supply Chain Finance and Industrial Policy Paths

Abstract Bank credit financing is an effective method to promote the development of enterprises, and this paper discusses the use of enterprises in the credit financing advantage supported by supply chain financial networks and industrial policy in the new era. In the paper, the strategic choice of enterprises using bank credit financing is analyzed, the Nash equilibrium point of the bank and the enterprise is modeled by calculus, and the game evolution model of enterprise use of credit financing advantage is constructed to explore the equilibrium distribution of bank credit financing. On this basis, the regression model of bank credit financing and enterprise reputation is established, and it is combined with relevant data for empirical analysis. The results show that under the initial conditions, there are two evolutionary stable strategies of (0,0,0) and (1,1,1) in the enterprise bank credit financing game system, which verifies the analysis for the stability of equilibrium point under the dual mechanism of supply chain finance and industrial policy. The regression coefficient of bank credit financing of enterprises with greater corporate reputation is 1.26, and when the explanatory variable is the indicator of short-term lending and long-term investment, the coefficient of long-term borrowing ratio is -0.003, with a significance level of 1%, and the increase of long-term borrowing ratio can significantly reduce the behavior of short-term lending and long-term investment of enterprises.

Research on financing strategy under the integration of green supply chain and blockchain technology

Green supply chain management (GSCM) has now risen to the strategic level of many companies. However, in practice, the introduction of green technology leads to the financial constraints for enterprises and there will be problems such as asymmetric information and low trust when enterprises adopt financing strategies. This paper builds a green supply chain model composed of a capital-constrained manufacturer and a retailer to study the impact of the application of blockchain technology on the manufacturer’s financing strategy. There are four financing strategies considered: no financing (NF) strategy, trade credit financing (TCF) strategy, bank credit financing (BCF) strategy and hybrid financing (HF) strategy. Through theoretical and numerical analysis of the impact of key parameters on the manufacturer's equilibrium financing strategy, we find that: there is no pure Pareto dominating financing strategy for this manufacturer. When the efficiency of blockchain technology investment is low, the NF strategy is optimal, while when the efficiency of blockchain technology investment is high, the TCF strategy is optimal. Base on these results, the green supply chains are suggested improving the investment efficiency of blockchain technology.

Optimal Green Input Level for a Capital-Constrained Supply Chain Considering Disruption Risk

Under increasingly stringent environmental regulations, inadequate green input levels from manufacturers may lead to substandard emissions and production shutdown, which further results in the disruption risk of the supply chain. This work investigates a green supply chain (GSC) consisting of one environmentally regulated manufacturer and one capital-constrained retailer who faces stochastic market demand. The manufacturer needs to make decisions on the green input level, which is related to the investment cost as well as supply disruption risk. The retailer has to determine product order quantities and financing decisions. We derive the operational equilibriums for the GSC system under three scenarios: no financing, trade credit financing (TCF), and bank credit financing (BCF), and recommend the optimal financial selection for the retailer via the comparison of three financial modes. The analytical and numerical results reveal that the manufacturer should improve the green input level within the financial capability to enhance the sustainable operation level of the supply chain. In addition, we find that the capital-constrained retailer will choose financing, since either BCF or TCF will result in a higher profit than no financing. Moreover, we obtain the threshold of green input level, with which we can decide whether to choose TCF or BCF under the given corresponding parameters.

ANALYSIS OF THE IMPLEMENTATION OF MICRO, SMALL, AND MEDIUM ENTITY FINANCIAL ACCOUNTING STANDARDS AND ITS IMPACTS ON THE FINANCIAL REPORT QUALITY OF SMALL AND MEDIUM-SIZED ENTERPRISES

<p><em><span lang="EN-US">This study aims to identify the perception of entrepreneurs regarding the Importance of bookkeeping and financial report related to Amountount of credit received by MSMEs, as well as the prospects for implementing the Financial Standards for Micro, Small, and Medium Entities (SAK EMKM), and their impacts on the quality of MSMEs financial reporting. This study used primary data collection by using questionnaires. Questionnaires were distributed using the purposive sample method, with MSMEs spread across the Banyumanik and Tembalang sub-districts as samples. Were 40 questionnaires sent directly to the selected MSMEs as Amountount of evidence adequacy? An in-depth review was conducted on the MSMEs chosen to complete the data and discussion. The provisions of MSMEs are business actors who have been running for more than two years and have applied for bank credit financing. Respondent data can be processed in 32 respondents. The analytical technique used is the Hypothesis Testing Model by Rizki (2012). </span><span lang="EN">The analysis technique used is multiple regression analysis. </span><span lang="EN-US">The hypothesis test results showed that nine hypotheses were accepted, and five were rejected. It was found that educational background contradicted the Importance of bookkeeping and recording SAK EMKM financial statements.</span></em></p>

Does green credit financing mode with cap‐and‐trade scheme really benefit all members?

AbstractThere is a never‐ending debate about whether the cap‐and‐trade mechanism is a valid means of achieving carbon reduction. In this study, we examine it from the perspective of supply chain financing, as the cap‐and‐trade scheme appears to be an excellent solution to avoid the carbon emission requirements imposed by green credit financing services. We develop a theoretical framework for comparing three distinct kinds of financing modes: bank credit financing, green credit financing, and green credit financing with a cap‐and‐trade scheme. Based on Stackelberg game with stochastic demand, we then derive optimal outputs for the manufacturer and wholesale prices for the supplier. Counterintuitively, the green credit financing mode is less profitable for manufacturers with low investment in clean production due to stringent carbon emission requirements, yet it is advantageous for the supplier through a higher wholesale price. Conversely, the green credit financing combined with cap‐and‐trade scheme will result in a different situation in which the manufacturer will benefit from the green credit's lower interest rate, but the cap‐and‐trade mechanism will diminish the supplier's power in the Stackelberg game and reduce her profits. Finally, from the perspective of social welfare, the green credit financing mode with cap‐and‐trade scheme will not always benefit for the whole society. Even though it can improve the profit of the manufacturer and consumer surplus, it may lead to higher carbon emission and reduce profits of the supplier when the investment in clean production technology is limited.

Do the differences in legal systems hinder international enterprises’ debt financing?

This study examines the impact of the differences in the legal system concerning obligation claim rights between host and multinational enterprises' (MNEs) home countries on bank credit financing by constructing a legal system distance index including four dimensions. Using 57,526 firm-year panel observations of 7,257 firms from 53 countries operating in China, the results find that legal system distance has a negative impact on foreign firms' debt financing. The influential mechanism is due to the increasing transaction costs. Further test finds that the negative effect declines as the cultural differences increase. The heterogeneity analysis finds that the negative impact of the legal system distance on the debt level is more pronounced for those foreign firms with a large scale, short operating age, not enough collateral, and sales in the domestic market, but shows no significant differences between a sole proprietorship and joint ventures. This study not only expands the literature on “Law and Finance” but also provides an implication for foreign firms' debt financing in the emerging host country.

Blockchain-Driven Supply Chain’s Financing and Coordination Strategy under Nash Bargaining Scheme

Blockchain-driven supply chain finance (SCF) has become an emerging supply chain financing mode. Compared with the traditional SCF mode, blockchain-driven SCF can shorten the transaction process and provide real trade data that cannot be tampered with, thereby improving the efficiency of capital operation. This article explores the financing and coordination problems of a blockchain-driven supply chain. Based on the three most common supply chain contracts (revenue-sharing contract, profit-sharing contract, and two-part tariff contract), we construct a comparative model of bank credit financing (BCF) and blockchain-driven SCF, discuss the optimal decision-making strategy of the supply chain, and quantitatively analyze the performance of supply chain under each mode. The results show the following: (i) there is a threshold for the usage rate of the blockchain-driven SCF platform; (ii) only when the platform usage rate is lower than the threshold, the blockchain-driven SCF mode which benefits both manufacturer and retailer is a better choice; (iii) the above results always hold if supply chain contracts can coordinate the supply chain in terms of quantity decisions; (iv) the blockchain-driven SCF mode is more efficient for supply chains which are less capital-constrained. This article provides a decision basis for the selection of supply chain financing channels and provides an idea for future research on blockchain-driven SCF.

Financing and information sharing in capital-constrained supply chain

This paper focuses on financing choices and information-sharing strategies in the capital-constrained supply chain. We model four scenarios with the capital constraints of the respective manufacturer and retailer using bank credit financing (BCF) and trade credit financing (TCF) approaches to address financing problems, and investigate the retailer’s willingness to share demand forecasting information. We find that TCF is an equilibrium financing choice for a capital-constrained supply chain. However, when a capital-constrained member chooses TCF, sharing demand information over the supply chain becomes more difficult. The interactions between the choices of financing approach and information sharing based on the game equilibriums, as well as the conditions that encourage the well-funded member to offer TCF in the capital-constrained supply chains, have also been analytically explored and numerically verified. Additional managerial insights are provided for discussions.

Financing preference and the role of credit insurance in a green supply chain

As environmental pollution becomes more serious, green supply chain management has gradually become a research hotspot. However, the fact is often ignored that many companies are small‐ and medium‐sized enterprises. They do not have enough capital to make green decisions. This paper studies a green supply chain financing system, including a green manufacturer and a capital‐constrained retailer and analyzes the effect of credit insurance on financing and product's green level. We consider consumers have a green preference. The retailer can finance through two methods: bank credit financing and trade credit financing. We find the manufacturer's financing preference is closely related to unit production cost and green investment cost coefficient. When the unit production cost is low, and the green investment cost coefficient is high, or the unit production cost is high, and the green investment cost coefficient is in the middle threshold, the manufacturer prefers to actively provide trade credit financing for the capital‐constrained retailer. And, in the former case, trade credit financing can also enhance the green level of the supply chain. Finally, we also find that credit insurance can mitigate the default risk of the retailer and help the manufacturer improve profits but cannot improve the product's green level.

Optimal financing strategies of a dual-channel closed-loop supply chain

Closed-loop supply chains (CLSCs) have attracted more attention due to its sustainability. However, few studies considered the capital constraints problem of the dual-channel CLSCs. We investigate the manufacturer’s financing strategies in a dual-channel CLSC consisting of a capital-constrained manufacturer and a retailer. The manufacturer can adopt four financial strategies: bank credit financing (BCF) strategy, retailer credit financing (RCF) strategy, and two mixed financing (MF) strategies (i.e., MF strategy of bank credit and equity financing (MF-BE), and MF strategy of retailer credit and equity financing (MF-RE)), respectively. We find that, when the retailer’s interest rate is equal to the bank’s interest rate, the manufacturer prefers to borrow money from the bank, and the MF-BE strategy is the optimal financing strategy for the manufacturer if the equity financing ratio satisfies certain condition. Interestingly, we also find that the retailer’s profits under the MF-RE strategy decrease with the equity financing ratio while the retailer’s profits under MF-BE strategy increase with the equity financing ratio.

Credit financing and channel encroachment: analysis of distribution choice in a dual-channel supply chain

Supply chain finance plays a significant role in alleviating capital shortage, which optimizes supply chain performance. In this paper, we discuss the interaction of credit financing and channel encroachment in a dual-channel supply chain structure consisting of a supplier and a retailer. Under the Stackelberg structure, we observe the interaction between credit financing and channel encroachment is heavily dependent on the substitution degree, potential online market, and production cost. Intuitively, the supplier is more likely to choose trade credit financing, except in the case where both the potential online market, substitution degree, and production cost are small; under these conditions, bank credit financing may be an equilibrium strategy. As long as the production cost is below a certain threshold, the supplier will choose the trade credit financing strategy.

Research on financing strategy of low-carbon supply chain based on cost-sharing contract.

The paper considers a low-carbon supply chain which consists of a capital constrained manufacturer and a retailer. We consider the retailer takes part in low-carbon cost sharing when the manufacturer faces capital constraints due to increasing investment in low-carbon production technologies. We further construct and analyze the performance of the supply chain under three financing strategies: capital constraint without financing (NF), trade credit financing (TCF), and bank credit financing (BCF). Our model provides a financing decision-making model for a low-carbon supply chain with capital constraints, and we design a cost-sharing contract can coordinate supply chain and strengthen the cooperation between enterprises. Moreover, through numerically analyzing the impact of cost-sharing ratio, low carbon preference coefficient of consumers, and interest rate on supply chain decisions and profits, we find (i) the profit of low-carbon supply chain members with capital constrain under TCF strategy is always better than BCF strategy; (ii) cost-sharing contract can increase the profit of the manufacturer and the retailer; and (iii) the low carbon preference coefficient of consumers is also a positive factor in the optimal profit of the manufacturer and retailer.

Bank Credit Financing and Trade Credit Financing Based on Carbon Emission Trading

Bank credit financing and trade credit financing are two basic ways for small- and medium-sized enterprises to solve financial difficulties. We studied a supply chain financing (SCF) system with one capital-constrained manufacturer and one capital-rich supplier, in which manufacturers can choose bank credit financing (BCF) or trade credit financing (TCF) to solve financial difficulties. Unlike the traditional SCF, we considered the influence of the carbon emission trading mechanism, and we designed BCF and TCF models and derived the equilibrium strategies of the supply chain members under a carbon-constrained environment. The research shows that the emission reduction level of manufacturers increases with the increase in carbon emission trading price, and the output of manufacturers increases with the increase in emission reduction level of manufacturers. When the manufacturer’s emission reduction level is low, the supplier’s benefits under BCF are higher than those under TCF. There is a threshold for the manufacturer’s emission reduction level. When the emission reduction level is higher than this threshold, the manufacturer chooses BCF mode with higher benefits; on the contrary, TCF mode is more profitable.

Impact of Interest Rate Risk on Supply Chain Network under Bank Credit and Trade Credit Financing

The purpose of this study is to propose a methodology that reflects the impact of interest rate risk on firms in supply chain network under bank financing and trade credit and further describe how trade credit improves the impact of interest rate risk on supply chain network through a financial flow equilibrium. A mean-variance framework and a network equilibrium analysis are integrated to provide a modeling framework. The model allows for the investigation of how bank credit financing (BCF) and trade credit financing (TCF) affect the payment strategy and financial flow of interconnected firms in supply chain networks and how they are affected by interest rate risks. The optimal behavior of manufacturers and retailers is described through variational inequality. We construct a supply chain network equilibrium model and derive qualitative properties of the solution and the function that becomes assimilated to the variational inequality problem. Additionally, variational inequality is solved using the modified projection method. This study extends the research on the impact of interest rate risk on the decision in supply chain network of firms. While other studies focus on the game between banks and firms, only a few authors have made attempts to examine the game between one manufacturer and one retailer in supply chain. An effective trade credit strategy is obtained by balancing cash and credit transactions. Through the case study, we learn how to balance the capital flow effectively to improve the negative impact of interest rate risk on supply chain.

Information Leakage and Financing Decisions in a Supply Chain with Corporate Social Responsibility and Supply Uncertainty

This paper investigates information leakage and financing simultaneously in a supply chain (SC) consisting of one capital-constrained supplier and two retailers with private demand-forecast signals. The supplier invests in corporate social responsibility (CSR) events and displays supply uncertainty. The supplier decides whether to leak information (L) or not (N). Additionally, the supplier has two financing strategies: bank credit financing (B) and trade credit financing (T). Thus, by combining the supplier’s information leakage and financing decisions, we formulated four possible strategies (i.e., NB, NT, LB, LT) and built a game analysis model to address the interaction of information leakage and financing decisions. We first provide the SC members’ optimal operational decisions (including the order quantity, the wholesale price and CSR effort level) under four strategies. Subsequently, we compare the profits of the suppliers and retailers under four strategies by combining analytical and numerical analysis. Several interesting results were found: (1) the supplier’s optimal wholesale price, CSR effort level, and profit under information leakage were higher than those under no information leakage; (2) the supplier’s financing decisions are dependent on the loan interest rate as low supply uncertainty and low supply correlation motivate the supplier to prefer choosing trade credit financing; and (3) finally, several interesting insights in managing SCs are provided.