The global factoring market is experiencing strong growth, says Jason Zammit, head of public and media relations, first vice president, Fimbank plc.
Factoring is a complete financial package that combines working capital financing, credit risk protection and collection services. It is considered the only source of financing that grows with the business. As sales increase, more cash becomes available, thus allowing businesses to constantly meet demand. In 2014, the global factoring market reached a volume of €2,348bn, which is the highest figure ever recorded.
Europe was the largest and fastest growing market worldwide, with a growth of eight per cent and with factoring volumes increasing to €1,463bn. This growth rate was the highest for the European market since 2011 and was driven by the commercial banking sector which controls approximately 90 per cent of Europe’s factoring volume. The UK, France, Germany and Italy remain the largest factoring markets in Europe and all these markets experienced positive growth last year.
In particular, factoring in the UK grew by 14 per cent to €350bn. Among the fastest growing markets for factoring are Lithuania with a 101 per cent increase (to €5.55bn), as well as Malta with a 66 per cent increase (to €296m). These and other countries were characterised by an increasing awareness of the benefits of such alternative sources of working capital. As factoring volumes continue to excel around the world, Europe remains the dominant region in this regard.
Asia, the second biggest factoring market in the world, experienced very strong growth since the start of the financial crisis. However, 2014 proved to be a more challenging year particularly in the Greater China region, although overall the Asian factoring market grew by 6.3 per cent.
Meanwhile, factoring volumes on the African continent experienced a nine per cent decrease in volume, mainly attributable to a 19 per cent decline in volume registered by South Africa. On a positive note, in 2014, South Africa accounted for just 75 per cent of the total factoring volume in Africa, a decline from 90 per cent only five years ago, thus highlighting the fact that factoring is on the rise in other parts of the continent. Morocco was the strongest performer in Africa as the local factoring market grew by 52 per cent to €4.2bn.
All figures were recently released by Factors Chain International, a leading network of global factoring companies with over 271 members in over 70 countries.
For more information, contact Fimbank’s Mediterranean Factoring Department on 2132 2100 or visit www.fimbank.com.
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