The tail end dilemma: How to successfully onboard SME suppliers in SCF?

White Paper: Supply Chain Finance and ESG series- Volume 3

In the third volume of our SCF and ESG series, we study the social aspect of sustainability. Recovering from a global pandemic, and with geopolitical tensions at a level unseen in recent decades, pressure on payment terms and liquidity shocks seem to be the norm again around the world. And again, Reverse Factoring (RF) is presented as a way to deal with the potential liquidity issues, especially for smaller suppliers. However, many RF programmes target large suppliers, mostly those with the largest shares of buyers’ purchasing volumes. Small suppliers seem out of the picture and including them in a programme seems to be a challenge, but it doesn’t have to be like that. In this paper, we investigate the long tail dilemma, how SME suppliers respond to RF, exploring both quantitative and qualitative factors, the five archetypes of the SME responses, and the supplier-buyer relationship, and we dive into the key implications for reaching the long tail. If you would like to receive this White Paper, please fill in the form below and you will receive a link via email from where you can download the White Paper. If you have not received it please check your spam.