Global factoring volume reaches all time high
Factoring achieves all-time high in 2015: €2,373bn, up 1.4% from 2014.
The global factoring market of €2,373bn turnover in 2015 – up 1,4% on 2014 – was the highest figure ever recorded.
However, the growth recorded in 2015 is well below the seven-year trend annual growth rate (CAGR) of 9%. This is mainly due to sharp drop of the factoring volume in Asia, the second largest factoring market.
Domestic factoring accounted for €1,843bn (78% of the total market) and international factoring €530bn (22%). Despite the continuous challenges in the global economy international cross-border factoring increased by 8% and it remains a driver of future factoring growth.
These figures were released by Factors Chain International (FCI), a leading network of global factoring companies.
Europe, the largest factoring market worldwide, was the strongest region with a 6% volume increase to €1,557bn (2014: €1,463bn). The growth has mainly been driven by the strategic emphasis towards factoring by the commercial banking sector which controls approximately 90% of Europe’s factoring volume. The top four European markets, UK, France, Germany and Italy, all grew last year and accounted for 66% of the region’s total. Within Europe, the fastest growing markets were: Serbia (+45% to €445m), Romania (+35% to €3,651m) and Hungary (+34% to €3,779m). As a region, Europe accounts for 66% of the world’s factoring market.
Asia, the second largest global factoring market decreased by 8% to €562.99bn with China remaining the largest market in the region. With a volume of €352.88bn (-13%), its share of the regional factoring market is now 63%. The Asian region share of the global cross-border factoring volume in 2015 also dropped to just over 40%. However, in positive contrast, Japan (+6% to €54.18bn) and Hong Kong (+9% to €33.42bn) both experienced increased volumes. As a region, Asia accounts for 24% of the world’s factoring market.
The Americas also suffered a decline, down 6% to €194.17bn. The US factoring market fell 3% from last year to €95bn. Brazil remained the second largest market in the Americas with a volume of €28.97bn (-9%). The third and fourth regional markets, Chile (-10% to €22.30bn) and Mexico (-24% to €19.29bn), both saw a decline in factoring volume. Uruguay, Argentina, Costa Rica and Colombia on the other hand grew by a very promising average of 20%. As a region, the Americas accounts for 8% of the world’s factoring market.
In Africa, factoring fell by 13% to €17.09bn. South Africa experienced a 10% decline in volume, from €14.53bn in 2014 to €13.04bn last year, accounting for 76% of the total African region, a decline from 90% only five years ago. Egypt was the strongest performer in the region as the local factoring market there grew by 23% to €537m. Africa accounts for less than 1% of the world’s factoring market.
Australia was practically stable and accounted for the remaining 1% of the world’s factoring market.
Commenting on the developments, Peter Mulroy, secretary general of Factors Chain International (FCI), said:
“On an overall global basis the industry grew in 2015, with strong performances again witnessed in Europe, especially in parts of Eastern Europe. Elsewhere unfortunately, the picture was much more challenging. In particular, the Asia region declined, with many affected by the disruptions felt in China due to its slowdown, and the effects of this continue to be felt going into 2016. Companies in the region are more reluctant to purchase in larger quantities due to the decline in retail sales in the greater China region and the uncertainty that brings to the market. The decline in commodity prices has also impacted volume, resulting in reduced valuation of invoices. The slowing economy has also resulted in a contraction in financing, especially affecting SMEs as more financial institutions struggle with deteriorating financial performance of their client base. However, some expect the slack to be taken up by new players and new entrants in the markets, from the numerous independent commercial factors that have evolved in China, fintechs and the smaller city and regional banks, which are growing in influence. Other global markets have also shown mixed performances and again these reflect the varying underlying economic environments. We expect 2016 to be another year of mixed fortunes.”
The FCI Global Factoring Statistics present on an annual basis the key factoring data around the world. They cover domestic and cross-border factoring volume collected from almost 290 members in over 70 countries.
