Chongqing will establish a factoring industry association on Dec 18, the liangjiang.gov.cn reported.

The association will work to establish a business credit system and talent training center. It will also help companies share industry information and solve their financing problems.

The association, which was in preparation for half a year, will become the first in west China. To date, regional factoring associations in Shanghai, Guangzhou, Tianjin and Beijing, have played a positive role in promoting the local industry.

As the only business factoring pioneering region in China, Chongqing has a steadily developing factoring industry. By November 2015, there were 40 business factoring companies. By September 2015, the registered capital of the business factoring industry exceeded 3.5 billion yuan.

According to the China Service Trade Association, the business revenue of the country’s factoring industry will reach 200 billion yuan ($31billion) this year. In the coming three to five years, annual sales of the business factoring industry will reach 500 billion yuan.

Factoring is a financial transaction and a type of debtor financing in which a business sells its accounts receivable to a third party at a discount to meet its present and immediate cash needs.

It is a safer, more flexible and efficient settlement compared with traditional financing and is especially popular among micro and small enterprises.