Supply chain finance key to SME expansion

Financial technology or fintech companies can back banks to develop supply chain finance or SCF with their strength in risk control, to better meet the demands of financing for small and medium-sized enterprises or SMEs, experts said.

Investopedia defines SCF as "a set of technology-based business and financing processes that link the various parties in a transaction - buyer, seller, and financing institutions - in order to lower financing costs and improve business efficiency" so as to provide "short-term credit that optimizes working capital for both the buyer and the seller".

SCF's estimated average annual growth rate in China from 2017 to 2020 is about 4.5 percent to 5 percent. By 2020, its output value in China is expected to reach 15 trillion yuan ($2.18 trillion), said Gao Feng, chief information officer of the China Banking Association, at a forum in late June.