To what extent does supply chain finance reduce the bankruptcy risk for SMEs?

Abstract

This paper highlights Supply Chain Finance's (SCF) contribution to reducing default risk among small and medium-sized enterprises (SMEs) involved in the supply chain. Through an exploratory study, we seek to understand how SCF influences the performance of SMEs. At the practical level, we conducted a qualitative study with twelve Moroccan companies. Following the saturation principle, we interviewed different managers to gain insight into their management practices and knowledge of SCF, which is still rare in our context. Semi-structured interviews were used to collect data.

Based on our findings, SCF effectively facilitates coordination between different company departments, such as finance, purchasing, and logistics. It also improves the adaptability of companies and offers more liquidity to SMEs. We will provide further details on these benefits in the following sections. Moreover, our paper contributes to conceptualizing SCF as a financial and non-financial approach to supply chain management.

Like any research, our paper has limitations, such as limited access to information and the field, given the novelty of the concept of SCF among Moroccan companies. Therefore, a statistical analysis using structural equations would be necessary to provide a more general and comprehensive synthesis.