Demica, a provider of specialised working capital solutions, in their latest Research Report - issue no. 17 - based on input from a number of top European banks and building on their models already applied at the local country level, estimate that:

• the market for cross-border supply chain finance (SCF), serving the supply chains of larger companies domiciled in the UK, France and Germany, is over €460 billion
• the largest cross-border SCF market is in Germany (€230 billion), followed by France (€125 billion) and then the UK (€115 billion)

They report that European bankers are of the view that only 5% - 10% of this available marketplace has yet been satisfied with SCF schemes. Bankers also report high levels of interest from supply chain participants in emerging economies and the Far East. However, legal and practical challenges remain for cross-border SCF programmes, which require expert analysis to assess the programmes' viability. Not surprisingly they also report that technology platforms are required to allow easy on-boarding by SCF programme participants in global supply chains.

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As the global recession continues, it is inevitable that large companies will have to protect and look after their key suppliers using supply chain finance. The future is bright for SCF. The only question is how suppliers will access early payment of their receivables.