Hong Kong-based Assured Asset Management has launched a blockchain-based supply chain finance solution with property developer Shui On Group.
The ‘Traceable Accounts Payable’ (TAP) platform plans to onboard suppliers of Shui On and will provide finance to them from banks and other financial institutions.
Shui On Group is the parent company of the Shanghai-based Shui On Land. The subsidiary is engaged in large scale property development projects across mainland China.
As with all supply chain finance solutions, the starting point is the buyer, in this case, Shui On. Through its involvement, banks can be sure that invoices are legitimate and can see when Shui On authorizes them for payment or disputes them.
TAP will record the transfer of goods and services and provide verifiable data on a supplier’s involvement with Shui On and other enterprises going forward. The blockchain solution will provide data to banks and credit investors so they can fund the suppliers’ receivables against the credit profile of the big enterprise. This addresses the issue of SMEs that may lack a good credit history or any credit rating at all.
In theory, blockchain should also provide an immutable record for audit purposes and can help to prevent double-financing.
Shui On will initially implement the solution for its vendors within the Chinese construction supply chain. Onboarding of suppliers will begin later this month, and the platform will open up to financers and banks in the first quarter of 2020.
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