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Financial Services to Small Enterprises (Chain Finance)

I. Solution Approach
Trade finance is a credit facility against customers' assets - account receivables, inventory generated during the course of business. It allows the borrower to get hold of funds for business without relying on own ability to repay the loan, very suitable to small-and-medium enterprises (SMEs). The trade finance service of ICBC is warmly welcomed by more and more SMEs since its launch.

On top of the individual trade finance products, ICBC launched a new service - "Chain Finance" designed for SMEs. "Chain Finance" features more services, simple formalities and fast response to customer demands, where different loan products are combined to cover all the funding required in different stages of one business/production cycle.

II. Solution Highlights
1. "Chain Finance" can be a combination of: credit facility for domestic trade - "order financing + domestic finance", "order financing + domestic invoice financing", "advance against import document/account payable financing + domestic factoring"; credit facility for international trade - "import T/T financing + domestic factoring", "import T/T financing + merchandize finance"; credit facility based on creditor right and goods ownership - "merchandize finance + domestic factoring", "import/domestic L/C + merchandize finance";
2. "Chain Finance" offers seamless solution to cover the funding required for procurement, inventory and sales. While it is easier for borrowers to apply for ICBC structured trade finance products, "Chain Finance" are loans for borrowers of different types, at different stages, in different conditions, to complete their domestic and international trades.
3. "Chain Finance" represents a new phase of ICBC's financing services to small-and-medium enterprises, interlocked with the supply chain, production chain of the companies instead of "Point Finance" for one transaction. Take the "advance against import document + merchandize finance" as an example. Before, the borrower (trading company) has to apply for a short-term loan (advance against import document) for buying the merchandize, then pledge the merchandize to ICBC after goods arrive and get another credit facility (merchandize finance) to repay the advance against import document. The steps are complicated. Now, with the support from the logistics companies, excluding the merchandize to be bought, the borrower does not need to produce other guarantees and applies for loan only once to cover the cost of procurement and inventory.

Note: Information herein is for reference only. Refer to the announcements and regulations of local branches for further details. ICBC reserves the final right of interpretation.

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