Corporate Finance, DeFi, Blockchain, Web3 News
Corporate Finance, DeFi, Blockchain News

Factors Chain International released today the much awaited figures for the 2012 worldwide factoring industry

Fresh statistics indicate that the total worldwide volume for factoring had a modest increase in 2012 with nearly 6% growth in Euro or nearly 8% in U.S. dollars compared to 2011. The world factoring total stands now at €2,132,231 million or US$ 2,811,346 million, in other words, well over 2 TRILLION, whether in Euro or in U.S. dollars.

Overall, the factoring industry is weathering the global recession much better than many other providers in the financial and insurance sectors. Very interesting is the fact that international factoring has grown in 2012 much faster than domestic factoring (in Euro 33.5% vis-à-vis 1.7% for domestic, or in U.S. dollars 35.8% vis-à-vis 3.4% for domestic).

Major markets with spectacular growth were Hong Kong (+69%), Russia (+66%), Poland (+37%), China (+26%), and Mexico (+24%).

The same positive results could be seen for the FCI membership in total, with international growth at three times the rate of domestic growth. As a group, total growth for FCI was more than double the market growth, resulting in an overall market share of 61%, or nearly 90% for international factoring. The results illustrate that exporters and importers, around the world, are becoming more and more familiar with the advantages to be derived from a factoring arrangement: working capital, credit risk protection and collection service for the exporter, while the importer benefits from buying on open account terms without the need to open letters of credit or to accept other payment conditions with a similar restrictive character.

When Mr. Jeroen Kohnstamm, Secretary General of FCI, was asked to comment on the recent statistics, he expressed confidence that the factoring industry is well positioned to play a more and more important role in providing working capital and risk management services to an ever increasing number of corporate clients.

He added the comment: Factors do not replace the services offered by banks. On the other hand, more and more banks develop a factoring capability, either through specialised subsidiaries or through specialised divisions/departments. The factoring approach to risk management is fundamentally different from the way banks assess financial risks. Through factoring, against the purchase of invoices, the funding is far more secure than in cases where other forms of collateral are used to provide security for traditional bank lending. As a result, the factoring industry is more and more an extension of the banking industry, but with ample space for independently owned factoring companies.

In connection with international factoring, Mr. Kohnstamm added: Just as predicted in the past, the importance of the Asian markets for cross-border factoring has further increased. The biggest percentage growth has been seen in inter-Asian trade, including a remarkable growth of import factoring in markets such as China, Taiwan and Hong Kong. Even so, the major EU countries and the U.S.A. remain strong “users” of cross-border factoring services, whether for exports or for imports.

For more detailed information please consult the attached figures (PDF below), or visit in a couple of days the FCI website for more generic information on (international) factoring:

The FCI website will be updated shortly to reflect the new 2012 factoring statistics.

Mardi 16 Avril 2013