Special Report: Supply chain finance
Key articles from the past year that documented SCF’s rise and subsequent growing pains
“If you are a pharmacy, like any small business, one of your biggest concerns is working capital and cashflow, and of course if you do not have a good working capital solution, you have to go to the bank and borrow money. That is going to be more expensive than the cash less the discount that you are getting from the supply chain finance provider”.
These words were not spoken at a EuroFinance event, but a UK parliamentary enquiry on 13 May. The speaker was former Prime Minister David Cameron, and the ‘supply chain finance provider’ he referred to was Greensill Capital, the lender that collapsed in March and is now facing a criminal probe from UK authorities. Cameron worked for Greensill and was summoned to the enquiry after evidence emerged of his frantic lobbying efforts on behalf of his stricken employer. In the words of one MP, “your reputation is now in tatters, Mr Cameron.”
For years, SCF has been part of the daily lives of the EuroFinance community, from corporate treasurers, to bankers and software vendors.
Amid the Greensill fallout, the industry is retrenching. The idea of applying SCF to public sector procurement is discredited: after all, a government that issues its own currency doesn’t need working capital. It should simply pay small suppliers promptly rather than enriching intermediaries like Greensill. And those who were once close to Greensill, such as SCF vendor Taulia, have pivoted swiftly away from it towards traditional bank funding channels.
In this special report, we have compiled key articles from the past year that documented SCF’s rise and subsequent growing pains.