This paper examines
the financing challenges faced by small and medium-sized enterprises (SMEs) in
supply chain management and explores supply chain finance (SCF) as a strategic
mechanism for improving supply chain resilience. Although SMEs play a critical
role in global employment, production, and supplier networks, they experience
severe credit constraints due to limited collateral, and restricted access to
conventional bank financing. The paper argues that buyer-initiated SCF,
particularly reverse factoring, can mitigate these constraints by allowing SME
suppliers to leverage the stronger credit profile of large buyers. SCF benefits
suppliers through earlier payment and lower financing costs, buyers through
reduced supply disruption, and funders through lower default risk. The study
emphasizes trust, collaboration, and cash-to-cash cycle improvement as
essential conditions for successful SCF implementation, while also identifying
knowledge, technology, and participation barriers.
