In China, many financial institutions have begun to pay attention to risk control only in recent years. Thus, risk control is rather weak. In many large financial institutions abroad, risk control department is very important and powerful, so much as that the Risk Control Officer is in a position to reject what the President has said.
It is, therefore, critical to ensure that the small entities are able to raise liquidity against their receivables. This problem can be institutionally tackled by factoring, which provides liquidity to SMEs against their receivables and can be an alternative source of working capital. World over, factoring is a preferred route of accessing working capital for SMEs and even larger organisations.