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Standard definitions for techniques of supply chain finance

06/06/2018

We have, on many occasions, made reference to the differing techniques for supply chain finance.

 

In order to provide further guidance, we fully recommend the paper produced by BAFT, EBA, FCI, ICC and ITFA in 2016 entitled "Standard Definitions for Techniques of Supply Chain Finance".

https://iccwbo.org/publication/standard-definitions-techniques-supply-chain-finance/

 

As mentioned on the ICC website, the intent of this initiative is to help create a consistent and common understanding about Supply Chain Finance (SCF) starting from the definition of terminology, to be followed by advocacy in support of global adoption of the standard definitions.

 

As they further state: "Numerous variations of SCF techniques and programmes exist today, and more will evolve, so that this document must of necessity be a ‘living document' that will require periodic updating."

 

We fully agree with the comment that global adoption of the suggested terminology - and the corresponding benefits that such adoption would bring - rest on advocacy that this document is intended to progress and support. As such, we believe it important that we draw this to the attention of those who may not have seen it.

 

Definitions include:

  • Receivables Discounting
  • Forfaiting
  • Factoring
  • Factoring Variations
  • Payables Finance
  • Loan or Advance against receivables
  • Distributor Finance
  • Loan or Advance against Inventory
  • Pre-shipment Finance
  • Bank Payment Obligation

 

You can find training material on many of these techniques at our website.

 

 

 

 

www.tradefinance.training


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