Online peer-to-peer lending platform and supply chain finance decisions and strategies

Abstract

Online peer-to-peer (P2P) lending platform is an emerging FinTech business model that establishes a link between investors and recipients of capital in supply chains (SCs). Businesses face capital constraints impacting directly on their final product price and demand. This article studies optimal decisions and operational strategies in a logistics network considering two capital-constrained manufacturers who produce products of different qualities and sell them to a retailer having deterministic demand over a specific period. The high quality product manufacturer borrows capital through an online P2P lending platform with a service fee, while the low quality product manufacturer pre-sells products for competing with the high quality product manufacturer. In this study, we find optimal prices of the SC participants, service rate of the online P2P platform and percentage of the pre-ordering quantity of the retailer. We analyse optimal Stackelberg and Nash equilibrium of the SC participants. We find that an increase in the amount of opportunity cost will cause a decrease in the pre-ordering quantity of the retailer affecting the SC profit in numerous ways. The online P2P lending platform should consider the amount of the retailer’s target profit in determining the platform’s service rate. We posit some practical insights based on our numerical study and observations for SC managers enabling them to take appropriate measures about their optimal strategies according to the networks’ existing economic conditions.

Small businesses and FinTech: a systematic review and future directions

“…In the case of P2P lending platform-backed supply chain finance, capital-constrained retailers' optimal decision of purchase orders to the manufacturer is governed by the interest rate and service charges offered by the lending platform [ 58 , 164 , 173 ].…”

Modeling the supply chain network in the fast-moving consumer goods industry during COVID-19 pandemic

“…To support the model's validity, the model's output and the results of the sensitivity analysis are provided. Taleizadeh et al ( 2022 ) investigated the best choices and operational tactics for a logistics network that took into account two capital-constrained producers that make goods of various quality and sell them to a retailer with deterministic demand over a predetermined time period. For a new sustainable-resilient health care network associated to the COVID-19 pandemic under uncertainty, Goodarzian et al ( 2022 ) designed a production, allocation, location, inventory keeping, distribution, and flow problems that also incorporated sustainability and resiliency ideas.…”

Model analysis of smart supply chain finance of platform-based enterprises under government supervision

“…Many different banks have since joined the SCF market and offer many different types of SCF platforms (Chen et al, 2022 ). SCF has traditionally been provided by commercial banks, but the marketplace is now being entered by core enterprises that are implementing new technologies, such as the Internet platform, to provide their customers advanced working capital financing in both pre- and post-invoice approval processes (Martin & Hofmann, 2017 ; Taleizadeh et al, 2022 ; Wuttke et al, 2013 ). For example, the world-renowned Chinese e-commerce companies JD.com and Alibaba have begun to provide SCF services to their online retailers and supply chain members, which sell diverse products through their platforms.…”