ICBC’s digital service supports the production line

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02:40

Geshile Technology is a company that manufactures components for signal transmission towers. The biggest concern for a company that runs such an activity is the reliability of supplies.

This is especially true in the midst of sharp increases in commodity prices. For example, the price of aluminum has increased by more than 50% in the first nine months of the year, creating cash flow problems for suppliers making aluminum parts. A delay in the delivery of a single component due to high raw material prices may affect the delivery of finished products.

To deal with these issues, Geshile and its suppliers use a financial product called ICBC E-Credit. In the event of financial problems, suppliers can use part of Geshile’s credit certificate to finance, cope with rising prices and purchase raw materials.

ICBC E-Credit is a supply chain finance product launched by the Industrial and Commercial Bank of China (ICBC). The bank’s branch in Shenzhen said it was a new way to use an existing product.

“Supply chain finance is nothing new. But this electronic credit launched by ICBC combines these products with blockchain technology, which enables services to reach multi-tiered suppliers in a timely and low-cost manner, ”ICBC Shenzhen Municipal Branch Vice Chairman Yang Fan explained.

The way to use it is simple. All a primary business needs to do is log into the system and make payment to their supplier by issuing an electronic credit online, which is part of their bank credit, and the supplier can use that credit for funding.

He added that making it easier for thousands of small and medium-sized businesses to finance will help them run their business more easily, as stabilizing the supply chain is also part of building a strong domestic market.

Geshile has more than 200 suppliers, and 30 percent of them have already joined this program. He says he has a large company to run and a thousand workers to feed, so he needs a stable supply chain to keep the business running. He also says he has a responsibility to grow and develop with all his partners in the production chain.

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