Cashing in on factoring

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01 July 2005

The boom in trade with Asia is providing a wealth of new prospects for international factors. Michael Rowe assesses the global development of the product line.

Factoring began in Europe and the US as a way of providing suppliers of manufactured goods in sectors such as textiles with liquidity in domestic sales, and later in some export deals. Today, the technique is starting to develop as a means of financing rapidly-growing exports from Asian countries. At the same time suppliers of factoring and invoice discounting services in the industrialized countries are devising new products and diversifying their activities in order to compete in markets that have grown to maturity.

According to figures released by Factors Chain International (FCI) in April, international factoring grew by 43% in 2004 to a total of a68.2 billion. World factoring overall (domestic plus international) increased by 13.1% to a860.2 billion. Strongest regional growh was seen in Asia, particularly Japan (+20%), Taiwan (+40%), Hong Kong (+40%) and China (+63%). (FCI provides an international network for member factoring organizations.)

Factoring...

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