| Factoring is an overall financial service of financing,such as sales ledger management,bad debt guarantee,credit information,etc. develops rapidly in recent years. Factoring business enjoys a long history in the world. In1968,Factors Chain International was established,but for the domestic banking industry,factoring is still an innovative financial product. Factoring originated from the18th century in England,and developed in America and western countries in1960s. As a novel trade financing method,factoring was widely applied into the domestic trade and international trade of many countries. Since the middle of the1990s,agencies providing factoring service and amount of factoring business developed rapidly throughout the world,and the world factoring also occurred with some new characteristics. China’s factoring business started in the1980s,and it is still in the development stage. Since the domestic factoring business is an emerging business,the related laws and regulations are still not perfect,and furthermore,the enterprise credit system in China is not sound, which may make it difficult to enlarge the business volume.The study on factoring business has a great significance for the development of commercial banks,which is mainly represented as:(1) Rapid development of factoring is a need of the commercial banks for further enlarging the market share of settlement business and increasing the earnings of intermediate business.(2) Rapid development of factoring is a need of further development of the middle and the small-sized enterprise and enlarging the influence of commercial banks. (3) Development of factoring can drive the sales of other financial products in commercial banks.There are three international factoring organizations in the world, namely, Factors Chain International (FCI),International Factoring Group (IFG) and Heller Oversea Corporation (HOC). In the global factoring market, Europe, Am erica and Asia are the most significant factoring markets,in which.the factoring market has already been mature in the two origins of factoring.including Europe and America. The scale of factoring Market in Australia is relatively small. And owing to the limitations in the economic development level in Africa.the development of factoring business still lags behind. In China,the factoring business is still in the development stage. Besides,the factoring business is one of the intermediate businesses in banks. After dozens of years of development,there is still a huge gap between China and developed countries,especially European countries and America. Confronted by the competitions from foreign financial industry,it is quite urgent to improve the factoring business level. Since the factoring business starts late in China.it still lags behind. In order to take a favorable position in fierce competition,it should make great efforts in product innovation and risk management and learn advanced management experience from foreign countries so as to satisfy the differentiated demand of customers to improve its comprehensive competitive ability.The existing problems in the factoring business of China’s commercial banks are reflected in the following aspects:the financial standards involved by the factoring business must serve the requirements of issuing loans in commercial banks; as for the credit risk management,China’s commercial bank lacks modern risk management tools and approaches, only focusing on the collaterals.and neglecting the credit evaluation ability and supervision of cash flow; it fails to provide sufficient financial service without collateral for high quality customers,or offer favorable risk pricing. As for product categories,the service projects and categories are limited,only concentrating on the financing and bad debt collection. And there are few services for other aspects. As for the credit risk,China’s commercial banks should undertake possible credit risks,which may increase the risk cost.In this paper,the problems encountered by Zongfu Sub-branch of XX Bank, and causes interrupting the development of factoring business were illustrated through analyzing the external environment of factoring business development, construction of commercial banks, development of independent factors, etc.. The underlying causes were studied, and countermeasures for further developing the factoring business of Zongfu Sub-branch of XX Bank were proposed.This paper mainly consists of five parts. In the first part,it was the introduction,including the research background and purpose,domestic and foreign research achievements,research method and innovative points of this paper, In the second part, the domestic and foreign development of factoring business,the meaning, types,business flows and functions of factoring business were illustrated, and the domestic and foreign development conditions of factoring business were introduced. It aims to improve the development status of factoring business by comparing the domestic and foreign status and referring to the advanced experience on foreign factoring business. In the third part, it was the development history of factoring business, and the existing problems in the development of factoring business in China were discovered by starting from the current status of commercial bank and by analyzing the external and internal environment, In the fourth part, it was the SWOT analysis for developing the factoring business for Zongfu Sub-branch of XX Bank, and the necessities for developing the factoring business were concluded through the comparative analysis of advantages and disadvantages. In the fifth part, countermeasures for further developing the factoring business in Zongfu Sub-branch were proposed, namely improving the external environment of the development of factoring business, strengthening the construction of commercial banks for promoting the development of factoring business, exploring and enriching the categories of factoring business actively, and enlarging the advertising of factoring business. |
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