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1. Introduction
The recent economic downturn caused a considerable reduction in the granting of new loans, with a significant increase in the cost of corporate borrowing (Ivashina and Scharfstein, 2010). Moreover, the collapse of the asset and mortgage-backed markets dried up liquidity from industries (Cornett et al., 2011). In these difficult times, firms (especially the most vulnerable ones) tried to extend trade credit from suppliers in order to supplement other forms of financing, while organisations less affected by this credit crunch took the role of liquidity providers, accepting an increase in payment terms (Coulibaly et al., 2013; Garcia-Appendini and Montoriol-Garriga, 2013). These effects contributed considerably to the need for solutions and programs that optimise working capital. Among these, one of the most important approaches is supply chain finance (SCF) (Polak et al., 2012). SCF aims to optimise financial flows at an inter-organisational level (Hofmann, 2005) through solutions implemented by financial institutions (Camerinelli, 2009) or technology providers (Lamoureux and Evans, 2011). The ultimate objective is to align financial flows with product and information flows within the supply chain, improving cash-flow management from a supply chain perspective (Wuttke et al., 2013b). The benefits of the SCF approach rely on cooperation among players within the supply chain, which typically results in lower debt costs, new opportunities for obtaining loans (especially for “weak” supply chain players), or reduced working capital within the supply chain. Moreover, the SCF approach often improves trust, commitment, and profitability throughout the chain (Randall and Farris, 2009).
The level of interest in the topic of SCF among practitioners has increased significantly. An example that illustrates this is the “Supply Chain Finance scheme” developed by the UK government[1]. This scheme is an agreement between the UK government and 37 of the biggest companies in the UK. The companies agree to notify a financial institution when an invoice is approved for payment; the bank is then able to offer a 100 per cent immediate advance to the supplier at a lower interest rate, knowing that the invoice will ultimately be paid by the large company.
Along with the expansion of the SCF market, interest in SCF is also growing among academics. The number of scientific articles focusing on SCF has increased in the...