Supply chain management (SCM) practices have become more and more relevant in the past decades since the companies have recognized the benefits of the collaborative relationships within and beyond their own organizations. The financial crisis of 2008-2009, has brought the need to assess the financial needs especially working capital requirements of the players in the Supply chain and their consequent effects on the business performance. This led to the origination of Supply chain finance (SCF) which takes into consideration various aspects of working capital requirements and choose a solution which is optimal for players involved in the process. India has a GDP of $2.94 trillion and the value of supply chain finance penetration is less than 1% of the GDP whereas western countries and advanced countries like Italy, Spain, and the UK have SCF around 10% of their GDP. Further, Supply chain finance has been attracting the interest of the enterprises which traditionally had difficulties in sourcing the finance for their enterprises. The most predominant sector which has difficulties in sourcing is Micro, Small, and Medium Enterprises (MSME) in India. This thesis is focused on the importance and difficulties faced by the MSME sector in obtaining the working capital from a cultural point of view, existing opportunities, and financial institutions offering the working capital solutions. Research begins with understanding the nomenclature and concepts of Supply chain finance, Indian GDP, the influence of Micro, small, and medium scale industries (MSME) on Indian GDP. The next step of research is focused on financial enterprises available to solve the working capital problems of MSME, Supply chain finance in India, and various financial enterprises present and solutions offered by them, Financial ecosystem and Fintech. The second part of the research focused on the analysis of 4000 Indian companies and their payment terms. Enterprises were classified into large, medium, small, and micro enterprises based on the classification of Indian enterprises, and payment terms trend was established. Further, enterprises were also divided based on sectors like automotive, construction, etc to have a better understanding of payment trends sector-wise. Supply chain finance is well below its potential to serve in the Indian market, it can be attributed to lack of information about MSME companies, low penetration of banks in some parts of the country, management preference for informal sources of loan, lack of knowledge about SCF solutions, MSME reluctance in investing in the technology and employees to upgrade and stay above the competition. From the financial institution's point of view, lack of collaterals, highly competitive nature of the MSME segment, lack of strong management, and business plan adds to the risk of default. Even though, several aspects are impacting the growth of SCF in India, increase in the high number of fintech start-ups in the lending market and growth of fintech as a whole, innovative approaches to assess the credibility of the companies using data analytics and artificial intelligence, government policies and infrastructure changes like priority lending for MSME sector, mandatory registration for trade receivables discount system are some of the aspects that would boost the Supply chain Finance (SCF) penetration in India.
Le pratiche di gestione della catena di fornitura (SCM) sono diventate sempre più rilevanti negli ultimi decenni da quando le aziende hanno riconosciuto i vantaggi delle relazioni di collaborazione all'interno e all'esterno delle proprie organizzazioni. La crisi finanziaria del 2008-2009, ha portato la necessità di valutare i fabbisogni finanziari soprattutto i fabbisogni di capitale circolante degli attori della Supply chain e i loro conseguenti effetti sulla performance aziendale. Ciò ha portato alla nascita del Supply chain finance (SCF) che prende in considerazione vari aspetti dei requisiti di capitale circolante e sceglie una soluzione ottimale per gli attori coinvolti nel processo. L'India ha un PIL di $ 2,94 trilioni e il valore della penetrazione dei finanziamenti della catena di approvvigionamento è inferiore all'1% del PIL, mentre i paesi occidentali e avanzati come Italia, Spagna e Regno Unito hanno SCF circa il 10% del loro PIL. Inoltre, il finanziamento della catena di approvvigionamento ha attirato l'interesse delle imprese che tradizionalmente avevano difficoltà a reperire i finanziamenti per le loro imprese. Il settore predominante che ha difficoltà nell'approvvigionamento è quello delle micro, piccole e medie imprese (MSME) in India. Questa tesi è focalizzata sull'importanza e le difficoltà incontrate dal settore MSME nell'ottenere il capitale circolante da un punto di vista culturale, le opportunità esistenti e le istituzioni finanziarie che offrono le soluzioni di capitale circolante. La ricerca inizia con la comprensione della nomenclatura e dei concetti di finanza della catena di approvvigionamento, PIL indiano, influenza delle micro, piccole e medie industrie (MSME) sul PIL indiano. Il passo successivo della ricerca è focalizzato sulle imprese finanziarie disponibili per risolvere i problemi di capitale circolante di MSME, Supply chain finance in India, e varie imprese finanziarie presenti e soluzioni da loro offerte, Financial Ecosystem e Fintech. La seconda parte della ricerca si è concentrata sull'analisi di 4000 aziende indiane e sui loro termini di pagamento. Le imprese sono state classificate in grandi, medie, piccole e micro imprese in base alla classificazione delle imprese indiane ed è stato stabilito l'andamento dei termini di pagamento. Inoltre, le imprese sono state divise anche in base a settori come l'automotive, l'edilizia, ecc. Per avere una migliore comprensione delle tendenze dei pagamenti a livello di settore. Il finanziamento della catena di approvvigionamento è ben al di sotto del suo potenziale di servire nel mercato indiano, può essere attribuito alla mancanza di informazioni sulle società MSME, bassa penetrazione delle banche in alcune parti del paese, preferenza del management per fonti informali di prestito, mancanza di conoscenza Soluzioni SCF, riluttanza MSME a investire nella tecnologia e dipendenti per aggiornare e rimanere al di sopra della concorrenza. Dal punto di vista dell'istituto finanziario, la mancanza di garanzie collaterali, la natura altamente competitiva del segmento MSME, la mancanza di una forte gestione e un piano aziendale si aggiungono al rischio di default. Anche se diversi aspetti stanno influenzando la crescita di SCF in India, l'aumento dell'elevato numero di start-up fintech nel mercato del credito e la crescita del fintech nel suo complesso, approcci innovativi per valutare la credibilità delle aziende che utilizzano analisi dei dati e artificiali intelligence, politiche governative e cambiamenti infrastrutturali come il prestito prioritario per il settore MSME, la registrazione obbligatoria per il sistema di sconti sui crediti commerciali sono alcuni degli aspetti che aumenterebbero la penetrazione della Supply Chain Finance (SCF) in India.
Supply chain finance in India : current status and potentialities 2019-2020
Chinta, Sandeep
2019/2020
Abstract
Supply chain management (SCM) practices have become more and more relevant in the past decades since the companies have recognized the benefits of the collaborative relationships within and beyond their own organizations. The financial crisis of 2008-2009, has brought the need to assess the financial needs especially working capital requirements of the players in the Supply chain and their consequent effects on the business performance. This led to the origination of Supply chain finance (SCF) which takes into consideration various aspects of working capital requirements and choose a solution which is optimal for players involved in the process. India has a GDP of $2.94 trillion and the value of supply chain finance penetration is less than 1% of the GDP whereas western countries and advanced countries like Italy, Spain, and the UK have SCF around 10% of their GDP. Further, Supply chain finance has been attracting the interest of the enterprises which traditionally had difficulties in sourcing the finance for their enterprises. The most predominant sector which has difficulties in sourcing is Micro, Small, and Medium Enterprises (MSME) in India. This thesis is focused on the importance and difficulties faced by the MSME sector in obtaining the working capital from a cultural point of view, existing opportunities, and financial institutions offering the working capital solutions. Research begins with understanding the nomenclature and concepts of Supply chain finance, Indian GDP, the influence of Micro, small, and medium scale industries (MSME) on Indian GDP. The next step of research is focused on financial enterprises available to solve the working capital problems of MSME, Supply chain finance in India, and various financial enterprises present and solutions offered by them, Financial ecosystem and Fintech. The second part of the research focused on the analysis of 4000 Indian companies and their payment terms. Enterprises were classified into large, medium, small, and micro enterprises based on the classification of Indian enterprises, and payment terms trend was established. Further, enterprises were also divided based on sectors like automotive, construction, etc to have a better understanding of payment trends sector-wise. Supply chain finance is well below its potential to serve in the Indian market, it can be attributed to lack of information about MSME companies, low penetration of banks in some parts of the country, management preference for informal sources of loan, lack of knowledge about SCF solutions, MSME reluctance in investing in the technology and employees to upgrade and stay above the competition. From the financial institution's point of view, lack of collaterals, highly competitive nature of the MSME segment, lack of strong management, and business plan adds to the risk of default. Even though, several aspects are impacting the growth of SCF in India, increase in the high number of fintech start-ups in the lending market and growth of fintech as a whole, innovative approaches to assess the credibility of the companies using data analytics and artificial intelligence, government policies and infrastructure changes like priority lending for MSME sector, mandatory registration for trade receivables discount system are some of the aspects that would boost the Supply chain Finance (SCF) penetration in India.| File | Dimensione | Formato | |
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https://hdl.handle.net/10589/166288