Analyzing the Effectiveness of Finance in Supply Chain in Solving the Financing Difficulties of SMEs Based on Grey Theory Model

Abstract

Small and medium-sized enterprises (SMEs) play an indispensable role in China’s national economic system, and they can play a critical role in promoting economic growth and full employment. The main reason for the disruption and impediment to the development of SME clusters is that the enterprises in the clusters are experiencing a “capital shortage,” as a result of the double contradiction between the clusters’ financial benefits and the difficulties in financing. Grey theory is a relatively new concept in the field of information processing. It proposes theories and methods for processing and analyzing incomplete information systems using mathematical methods. This study uses finance in supply chain as a new research perspective to investigate the effectiveness of finance in supply chain in resolving SMEs’ financing problems using the Grey theory model, with the goal of resolving SMEs’ financing problems. When comparing the results of the Grey theory model and the regression analysis model, the relative error of the Grey theory model is on average 12.2% lower than that of the regression analysis model, indicating that the Grey theory model greatly improves accuracy. As a result, using the Grey theory model to solve supply chain financing and SMEs’ difficulties can share risks, share credit, reduce transaction costs, weaken information asymmetry, and achieve mutual benefits and a win-win situation. It is expected to promote the development of the finance in supply chain model, mobilise enterprise enthusiasm for using finance in supply chain, improve finance in supply chain operational efficiency, and promote finance in supply chain development.