Supplier financing company FnConn and marketplace lending platform Dianrong, both based in China, have announced the launch of Chained Finance, a new supply chain financing portal that the firms claim is the first to be based on blockchain.
An announcement Monday (Mar. 6) said Chained Finance aims to break down barriers facing other supply chain financing firms, which, according to FnConn and Dianrong, have only been able to meet about 15 percent of suppliers in need of financing in China. Using blockchain technology, Chained Finance can access some of the smaller suppliers in China to fill the need.
FnConn and Dianrong recently completed a pilot of Chained Finance’s services, originating $6.5 million in financing to SME supply chain companies in the nation. Now, the company will launch on a broader scale with an initial focus on the electronics, auto and garment manufacturing spaces.
The companies said their platform could help supply chain financing companies potentially triple the number of small suppliers they reach.
“Blockchain is revolutionizing the finance industry and offers seamless solutions to any company operating and financing complicated supply chains,” said Dianrong founder and CEO Soul Htite in a statement. “The complexity and scale of supply chain finance has posed major challenges in ensuring adequate funding and efficient operations. Chained Finance creates a unique ecosystem that will provide supply chains with easier access to funding at competitive rates, In return, supply chain operators will gain greater visibility of their suppliers and the many layers of finance embedded in the process.”
“By using the Chained Finance platform, every payment, every supply chain transaction, can be more transparent, manageable and easily authenticated,” said FnConn Executive Director and CEO Jack Lee in another statement.“Chained Finance will provide timely, efficient support to far more suppliers of all sizes. It will also help ensure the timely delivery of products to end customers and improve efficiencies across the entire supply chain.”