introduction of factoring in bangladesh · 2018. 2. 19. · international factoring have been...

ELK ASIA PACIFIC JOURNAL OF FINANCE AND RISK MANAGEMENT

ISSN 2349-2325 (Online); DOI: 10.16962/EAPJFRM/issn. 2349-2325/2015; Volume 8 Issue 4 (2017)

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INTRODUCTION OF FACTORING IN BANGLADESH

Rajib Datta Afroza Sultana Sharmin Akter Sonia

Assistant Professor Lecturer Lecturer

Department of Finance, Department of Finance Department of Finance

Premier University Premier University Premier University

Chittagong, Bangladesh. Chittagong, Bangladesh Chittagong, Bangladesh

[email protected] [email protected] [email protected]

ABSTRACT

Business sector of Bangladesh is very much dependent on conventional payment and financing methods. This over

dependency on some specific methods like bank loan and Letter of Credit (L/C) poses unavailability and

inconvenience for business people to have financial access. Factoring, in different form, is getting popularity in the

business world. Some features of factoring make it unique in comparison to conventional bank loan and letter of

credit. Developed countries and some developing countries prefer factoring for short term financing purpose and as

a sophisticated payment method. Though guidelines on factoring have been published by Bangladesh bank, full-

fledged practice of factoring has not been started in Bangladesh yet. This paper is a conceptual work on factoring,

considering it as a convenient payment and financing method. Mechanism of factoring in different forms has been

described elaborately to understand what factoring is, how does it work and what benefits Bangladesh can get by

practicing factoring. An attempt has been made to differentiate factoring from mostly used payment and financing

methods by studying the mechanism closely. Many articles regarding mechanisms of both domestic and

international factoring have been collected and studied. This paper shows, at domestic level business people of

Bangladesh can be benefitted by practicing factoring, as it transfers the risk of non-payment to a the factor at the

beginning of the contract. Also in international business factoring procedure can be less complex, less costly and

more secure done than Letter of Credit (L/C), as reduced number of parties are involved here and an internationally

recognized organization, Factor Chain Internationalis guiding the whole procedure. Bangladesh bank is working in

association with Factor Chain International (FCI) to introduce factoring at domestic and international level. Steps

like, adopting legal framework, arranging training for officials and getting membership from international factor

chain are some of the recommendations provided by the authors to ensure an environment that will encourage

business people to practice factoring in Bangladesh.

Keywords: Factor, Domestic factoring, International factoring, Short term financing, A/c Receivable.

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1. INTRODUCTION

In a current competitive business world, the

preferences of payment and financing

procedures of customers, buyers and sellers

are changing in consideration of

convenience, negative incidents and growth

potentials. Related parties are now attracted

to new financial tools that will ensure them a

more convenient business position. In

financial year 2015, Bangladesh graduated

from the status of low income country to the

status of lower middle income country. A

modest average annual growth rate of 6.2

percent has been achieved over the last

decades (Bangladesh bank). Patronization of

local and international business is needed to

keep and improve this growth. Though

weighted average interest rate on lending

from all commercial banks is low (9.39% in

October 2017, according to Bangladesh

bank) now, but it is yet high for new or

small business firms to meet their short term

financing need through access into bank

loan. On October 2017, small industries got

working capital loans from different

commercial banks of Bangladesh at different

rates, ranging from minimum 9% to the

maximum 18% (Bangladesh Bank).

New innovative financing tool like

factoring may ease some parts of the

financing problems of these small and

medium firms. As Bangladesh’s SME sector

is growing in a rapid pace, factoring can be

an attractive financing alternative. Different

empirical studies on young companies

showed that infant and small companies who

do not have fixed assets to be used as

collateral may find factoring as a convenient

option for short term financing (Klapper,

2005; Borgia, 2003). Factoring can be an

attractive option for young companies as

they cannot enter into the organized money

market and bank loans because of the

absence of previous financial performance

history (Beck &Demirguc-Kunt, 2006;

Mahmud, 2015).

Also, in international business arena of

Bangladesh, for maintaining a modest

balance of payment, Government is trying to

increase its export revenue. Though the total

export volume are increasing but the growth

rate of export revenue is experiencing a

slower pace, 3.3 percent in FY 15 compared

to 12.1 percent in FY 14 (Financial Stability



Report 2016, Bangladesh bank). Preferring

importers’ choice and experiencing

inconvenience in other payment methods

available, traders are now seeking new

methods of international trade payment and

financing. From FY July 2017 to October

2017,Total Import of Bangladesh

wereUS$16,583.12 million ; where US$

16,195.10 million of total import payment

were settled through L/C; when only

US$388.02 million of total import were

done by other payment methods(Foreign

Exchange Operation Department,

Bangladesh bank). That means 97.66% of

total import settlement has been done under

L/C arrangement. But in recent time

different payment fraud cases and

complexities regarding L/C have made

business people think about some alternative

sources of payments and financing (Mizan,

2003).Also different operational and

financial ratios of firms, practicing factoring

in our neighboring country India, showed a

positive result on the overall financial health

of the firm; which can be a motivation for

Bangladeshi firms that they can practice

factoring by following the examples of

neighboring Indian firms after adjusting its

own socio economic aspects (Banerjee,

2010).

Though two guidelines on domestic and

international factoring have been published

by Bangladesh bank, practice of factoring

has not been increased. As discussed earlier,

there are still over dependency on

conventional bank loan and Letter of Credit

(L/C). Very few research works have been

done over factoring and its possible

prospects in Bangladesh.

So the aim of this paper is to motivate

business people of Bangladesh to consider

factoring as an alternative payment and

financing option, which may ensues them of

broader access to finance and of convenient

transactions. Achieving this aim, the

objective of this work is to provide a

detailed idea about what factoring is, how it

works and what benefits it provides over the

two mostly used short term financing and

payment procedures of business in

Bangladesh.

2. LITERATURE REVIEW

Different articles were reviewed in this

context and some summary has been derived

which are given in the following sub

headings:

2.1.What is Factor and Factoring?



Any organization registered for the purpose

of factoring or a commercial bank can be

considered as factor if it is engaged in the

business of buying a/c receivable.

UNIDROIT (International Institute for the

Unification of Private Law) defines factor as

a person who performs at least two of the

four functions; arranging finance for the

client, maintaining the factored receivable

account of client, collecting the invoiced

money and protecting the client against risk.

Factoring is a short term financing tool,

backed by creditworthy account receivable

arising from the sales of goods and services

in the domestic and international market. If

the parties involved in factoring agreement

belong to a common country, the

arrangement is considered as domestic

factoring whereas, international factoring is

an agreement whereby a factor agrees to

purchase an exporter’s trade debt and

provides finance, collects debts and assumes

the risk of non-payment. According to

factoring contract, any firm that sells its a/c

receivable, arising from selling their goods

and services in credit, to the factor for

immediate liquidity or cash is considered as

client/ seller and those who buy products

and services in credit are known as Account

Debtor/ Customer. (Tatge&Tatge, 2012).

Domestic and International factoring can be

done in two forms, non-recourse and

recourse factoring. In case of non-recourse

factoring, factor assumes the credit risk of

its client by purchasing their a/c receivables.

It can be considered as true sale because the

accounts sold to the factor goes off the

balance sheet of client and the factor is

responsible for the collection of the money.

So factor bears the risk of nonpayment. In

this type of factoring, factor charges a higher

amount of commission and fees than that of

recourse factoring. But Factor will not be

liable to bear the risk of bad debts if there is

a breach of warranties, misrepresentation,

fraud etc. (Hoti, 2014).On the contrary, in

recourse factoring the factor does not

assume the credit risk of its client, which

means if it does not get the money from

account debtor, usually within 60-90 days

they will charge their client for the payment.

So the money client gets from such contract

can be treated as secured loan from the

factor. (Hoti, 2014).

2.2.The Factoring Mechanism

The mechanism of domestic and

international factoring are elaborated below:



2.2.1 Domestic with Recourse

Factoring(Refer fig 1)

Fig 1: mechanism of domestic factoring

(with recourse) source: Bangladesh bank,

(modified by authors)

Step 1: For a factoring agreement first there

should be a typical business buy sell deal

between buyer and seller where the seller

agrees to sell his products or services on

credit.

Step 2: The seller delivers the goods or

provides the services to the buyer.

Step 3: The seller contact a factor for selling

the a/c receivables.

Step 4: Before entering into an agreement

the factor verifies whether:

The sales contract bears the clause

that this account can be factored.

The client transfers the right to

collect the money arising from the

receivable to the factor.

All the conditions written in the sell-

buy contract has been met or not.

Finally the factor confirms that this

account has never pledged before as

a source of financing.

Step 5: If the factor satisfies with all the

verifications done in the previous step it

makes an advance payment to the client/

seller which is usually 80%-90% of the

invoiced value of the receivable.

Step 6: The seller or the factor’s client sends

the invoice which contains the instruction to

pay the money to the factor.

Step 7: Factor now takes initiative to collect

the money; for that it tracks the aging of

client’s invoice and sends reminder to the

a/c debtors or buyer that his or her a/c

receivable is due.

Step 8: After collecting the money from

buyer or a/c receivable the factor sends the

remaining amount after deducting the

commission or service charges to the client.

Factor generally goes for any of the

following policies while disbursing the

remaining amount to client; it may pay

periodically such as once in a week, may

pay remaining money to client only after

collecting sufficient amount from a/c debtor

or only after collecting the whole amount of

the invoice factor may pay the remaining

amount.

Step 9: If the factor cannot collect the

money from a/c debtor, client will be

responsible for the repayment of the advance



and the commission to factor. (Ivanovic,

Baresa & Bogdan, 2011)

2.2.1. Domestic Non-recourse factoring

In case of non-recourse factoring the seller

needs to contact a factor before selling the

product because the factor bears the risk of

nonpayment. So, Factor checks the credit

worthiness of the buyer and approves the

credit sale. Only after getting the approval

the seller can sell the products to the buyer

(Ivanovic, Baresa & Bogdan, 2011)

2.2.3. International Factoring

International Factoring can be of two form

Two factor system and Back to Back

factoring.

2.2.3.1. Two Factor: Two factoring system

is one of the commonly used factoring

system when it comes to international trade.

Here the factoring activities are done in two

phases.

The process followed in two factor system

can be separated into two phases:

a) Pre shipment phase

b) Post shipment phase(Refer fig 2)

Fig 2: mechanism of international factoring

(pre shipment phase) source: Bangladesh

bank, modified by authors

Step 1: In the first step of this type of

factoring a negotiation happens between

importer and exporter. After checking

exporter’s product quality, specification,

credit terms and price, importer agrees to

purchase goods from exporter. Then

exporter checks the maximum amount of

credit that is needed to be granted to the

importer.

Step 2: The exporter approaches to a factor

from its own country for the selling of the

receivable account that will arise from the

export. Here the export factor checks

exporter’s goodwill and finds out its

capability of delivering invoiced goods

Step 3: Export factor approaches another

factor from importer’s country which is

commonly referred as import factor for the

investigation of creditworthiness of the

importer.

Step 4: In this stage import factor checks the

credit rating and reputation of the importer

to meet the export factor’s query about

importer’s ability to satisfy the claimed

amount that arises from the import.

Step 5: After the collection of the

information about importer the import factor

can take any of the decisions; enter into an



agreement with export factor for the

collection of the whole invoiced amount

thus assume the credit risk, grant an amount

lesser than the requested invoiced value or

reject the request of entering into any

contract.

Step 6: Based on the import factor’s

decision, now export factor decides about

the approval, rejection or lower limit of

credit approval and inform the exporter

about its decision. If the exporter is

interested, export factor then specifies the

fees that will be charged by both the factors

together for their services along with all the

terms and conditions.

Step 7: If the exporter/client agrees to all the

terms and conditions given by the export

factors, they enter into a formal factoring

contract/agreement.

Step 8: The export factor now informs the

import factor about the agreement

Step 9: In the final step of pre shipment

phase the export factor notifies the exporter

that it has transferred/assigned the right of

collection of the invoiced amount to the

import factor and notifies the importer to

make payment to the import factor, not to

the exporter. (Guidelines on International

Factoring prepared for Bangladesh Bank,

2016).

Post Shipment Phase (Refer fig 3)

Fig 3: mechanism of international factoring

(post shipment phase) source: Bangladesh

bank, modified by authors

Step 1: The exporter ships the goods to the

importer with invoice and other shipping

documents which should include the

assignment clause of factored account.

Sometimes exporter can send these

documents to importer through the export

factor.

Step 2: The exporter proves it’s shipment of

goods by submitting the copies of invoice,

shipping documents, packing list etc. to the

export factor.

Step 3: Being satisfied about the authenticity

of shipment, export factor approves advance

fund to exporter as per agreed terms.

Step 4: Here export factor will notifies

import factor about the legitimacy of the

shipment and conducts further follow up

with import factor for the collection of the

fund.

Step 5: Import factor follows the standard

procedure set by factoring chain for



collecting money from importer and

approves maximum 7 days of delay.

Step 6: Import factor collects the money

from importer and assumes any kind of risk

for nonpayment.

Step 7: import factor remits the full amount

of the payment made by importer to export

factor.

Step 8: After deducting all the charges of

export and import factor, export factor pays

the balance amount of money to exporter.

Here, the charges of export factor may range

from 0.5% to 2.5%, depending upon the

nature of the ledger, the number of invoices

and their value.

Step 9: At last export factor pays the charges

of import factor as per its

contract.(Guidelines on International

Factoring prepared for Bangladesh Bank,

2016).

2.2.3.2. Back to Back Factoring

The procedure of back to back Factoring is

illustrated below(Refer fig 4)

Fig 4: mechanism of back to back factoring

(authors’ own creation)

Step 1: Exporter sells its product to

distributor

Step 2: Exporter contract an export factor to

finance this sales to distributor.

Step 3: Distributor sells the product to its

buyer/customer and contract another factor

from its own country can be termed as

import factor.

Step 4: Here a tripartite agreement to be

signed between import factor, export factor

and distributor, according to which import

factor is obliged to collect the money from

distributors’ buyer/customer and send the

amount to export factor after deduction of

amount required to cover distributors’

expense and profit.

Step5: After receiving the money export

factor charges off the factoring fee and

sends it to the exporter.(Guidelines on

International Factoring prepared for

Bangladesh Bank, 2016).

2.3. Organizations Assisting International

Factoring

Factoring process is mostly promoted by

two associations namely Factor Chin

International (FCI) and International Factors

Group (IFG), when the later one is merged

into the former in January 1, 2016.In 1999;

IFG was formed to facilitate the expansion

of cross border trade by the membership of



different countries. In 1968, a new

organization FCI formed to solve the

financing problems of traders situated within

and outside the country. It is an umbrella

organization with the participation of 400

members from 90 independent factoring

countries. Now FCI is a network of

coordinating import factor and export factor

from different countries. It promotes the best

practice of factoring services worldwide and

help the policy makers of different countries

to introduce factoring and others financing

tools. Banks and other financial institutions

are needed to be member of this group in

order to engage in international factoring.

Members should be abide by the constitution

and rules-regulationsset by the organization

and must be well reputed or have minimum

net worth of US dollar 2 millions.

2.4.Growth of Factoring Practiced in World

Table 1: Total Factoring Volume 2010-

2015(Refer table 1)

Source: FCI Annual Review 2016

Though there was a slight fall of 1% in

2015, world’s domestic factoring volume

alwaysenjoyed a continuous growth till

2014. On the other hand, world’s

international factoring volume has

experienced continuous growth till 2015 and

the highest growth rate of 33% was reported

in the year 2012.

Table 2: Factoring Volume in Asia Source:

FCI Annual Review 2016(Refer table 2)

(Refer fig 5)

Fig 5: Factoring volume in Asia

From year 2009 to 2014 Asia’s factoring

volume showed constant upward trend and

in the year 2014 it reached to a new high of

€614 billion. It has experienced a growth of

69% in the year 2010, which was the highest

in the last seven years. The slight fall on

factoring volume in 2015 was attributed to

the slower economic growth.

FCI has 147 members from Asia up to 2015

where China is the dominating member and

in near future a good volume is expected

from Indian factoring market. These recent

development of factoring in Asia motivates

Bangladesh to adopt this as a source of short

term financing. To promote International

factoring in Bangladesh FCI has organized a

workshop named “Workshop for

international factoring” in collaboration with

ICC-Bangladesh, which gives a positive

vibe regarding the development of factoring

industry in Bangladesh.



2.5.Initiatives Taken by Bangladesh Bank in

the Development of Factoring in

Bangladesh

In Bangladesh SME is a growing sector

contributing a significant portion in GDP.

But in terms of financing, these small and

medium organizations always face problem

due to lack of financial data of performance

history, credit profile and collateral. So

usually these organizations do not have

access to capital and money markets and

bank loan. These problems direct many

organizations to look for alternative source

of financing.

Identifying these problems, Bangladesh

bank has realized the importance of

factoring in Bangladesh. For that

Bangladesh Bank first provided guidelines

for domestic factoring prepared by

consultative committee where it provided

many rules regarding; services a factor can

provide to its client and ranges of rates that a

factor can charge for the services,

procedures to assess credit risk of a client,

organization structure of a factoring firm

and approval procedures of a factoring

agreement. Also Bangladesh Bank has

provided guidelines regarding credit and risk

management and internal audit needed to be

followed by a factoring firm. After the

publication of the guidelines, Non-bank

financial institutions like IDLC, United

leasing, Lanka Bangla Finance have started

practicing factoring at domestic level.

Commercial banks like Eastern Bank and

Trust bank also practicing it at a very small

scale.

In Bangladesh, large portion of export

payments are settled through the letter of

credit. But the popularity of letter of credit is

diminishing due to some fraud incidents,

non-payments, and the lengthy procedure of

settlement of claim. Many developed and

developing countries are preferring factoring

over letter of credit as method of export

payment. So in order to keep pace with them

and to promote international business

ministry of finance has allowed factoring in

its new export policy 2015-2018.In 2016,

Bangladesh Bank has prepared another

working paper where it provided guidelines

for international factoring as a means of

payment for international trade. But the

legal framework has still not been provided

and there is no established act for factoring.

So Bangladesh Bank has yet to play a

crucial role before applying international



factoring in Bangladesh. (Guidelines on

International Factoring prepared for

Bangladesh Bank, 2016).

3. FINDINGS

As mentioned earlier, the methodology

adopted for this study is conceptual analysis.

The authors have collected and studied

research works done on factoring by

researchers from Bangladesh and abroad.

The data was collected from some other

sources like journals, newspapers, books etc.

After studying factoring mechanism, the

following findings have been found which

are presented in sub headings.

3.1.How Factoring as a Short Term

Financing Tool is Different from Mostly

Used Traditional Bank Financing?

In factoring, factor and client’s customer

who can also be referred as account debtor,

create a legal relationship through the

immediate possession of invoice by the

factor. So factor gains the right to collect the

factored invoice and account debtor is

obliged to repay the money to factor. But in

traditional bank lending, without the default

of the client there would be no legal right of

lender to collect the invoiced money from

debtor.

In traditional bank financing, lender focuses

more on creditworthiness of its client and

consider its account receivables as a

secondary source of repayment. But in

factoring, factor focuses more on the credit

worthiness of the clients’ customer as it

considers the a/c receivable as a primary

source of repayment.

3.2.How Factoring as an International

Payment Method is Different from the

Mostly Used Letter of Credit (L/C)?

Letter of credit (L/C) is an arrangement

where buyers’ bank gives guarantee to seller

that payment will be sent on time and

correct amount. Factoring is a short term

financing tool, backed by creditworthy

account receivable arising from the sales of

goods and services in the domestic and

international market.

In case of L/C, Importer’s bank/ issuing

bank may face the risk of nonpayment of

importer. In case of factoring before

entering into a contract, import factor adopts

standard procedure for credit checking and

collection of payment guided by FCI, so any

possibility of nonpayment by importer will

be reduced significantly by factoring.



In case of L/C, Exporter bank/confirming

bank is in a risk that once having paid the

exporter (beneficiary), it may not collect the

money from issuing bank for the insolvency

of issuing bank. Whereas export factor will

surely get the money from import factor as

import factor must be a well reputed and

solvent company as per FCI constitution,

unless will never be a member of FCI.

Creditworthiness of importer’s bank is relied

upon in L/C contract whereas

creditworthiness of importer is needed to be

ensured for factoring contract. Importer

takes initiative to open L/C and approaches

to a confirming bank of its country. In case

of factoring, exporter approaches to an

export factor for financing by selling its

creditworthy export receivable.

A general commercial bank, who can handle

the foreign exchange, can issue and give

confirmation for L/C. whereas, though a

commercial bank can be involved in

domestic factoring, in order to perform

international factoring, the factor should

have to be a member of world accepted

factor chain.

L/C is costly because different parties are

related here like nominating bank, issuing

bank, reimbursing bank, confirming bank

etc. Some of these banks only do the work

of checking the creditworthiness of

importer’s bank by charging commission.

Factoring is less costly than L/C because

only two parties involved here, i.e. import

factor and export factor.

3.3. Potential Impacts of Introduction of

Factoring in the Business Arena of

Bangladesh

3.3.1. For Seller/Client/Exporter

Factor reduces the overhead cost of client

and save time and energy by performing

some activities like sales ledger

administration, credit control, debt

collection; so, Functions like planning,

organizing, controlling are maintained more

efficiently through factoring.

Non-recourse factoring improves the credit

standing of a business firm as a factor

assumes the risk of nonpayment of credit

sales; also, the advance provided by a factor

will enable its client to pay its liabilities

promptly. Here client (exporter) needs not to

maintain separate credit department also the

proportion of credit sale will be increased

which will affect the total sales proceeds

positively. Unlike traditional bank credit,



factoring takes sales invoice as a means of

collateral, so fixed assets are not required.

Factoring the account receivable enables the

clients to reduce operating cycle period, this

results in reduction of working capital need

and also eliminates the interest on working

capital. The advance payment increases

client’s ability to meet the liabilities and

client enjoys an improved credit standing

position. Efficiency ratios such as return on

asset etc. are improved, as financial structure

is not affected by selling account receivable.

Advance funds from the export factor

protect the exporter from any further foreign

exchange fluctuations. Moreover Import

factor is in a better position to check the

credibility of importer as situating the same

country and having the same language. So it

helps exporter to take right decision prior to

sale of goods and also to collect the payment

promptly.

Factoring helps to maintain smooth

relationship between customer and seller, as

the follow-up process of repayment are done

by factor.

3.3.2.For Customer/Importer

Since client gets relieve from bearing extra

overhead, customer gets goods and services

at lower price, better terms and discounts.

Absence of L/C opening requirement, allows

importer to a more flexible business

negotiation with exporter. It also reduces the

extra cost of L/C opening and further

negotiation. Factoring procedure is less

costly and less time consuming for importer,

compared to the mostly used L/C procedure.

Also the growing requirement for L/C

margin surpasses the importer’s financial

ability.

4. CONCLUSION

This paper is an attempt to clarify the

concept of Factoring and to find some

benefits of it to business arena of

Bangladesh. In one context it describes both

the domestic and international Factoring

mechanism in a simplified way, also

differentiate it from traditional payment and

financing options; which can motivate

business people to go for alternative

payment and financing options. Bangladesh

should adopt legal frame work regarding

what actions will be taken if any of the

parties involved in factoring agreement is

accused of fraudulence activities and breach

of warranties of contract. For introducing

international factoring in Bangladesh,

Bangladesh has to adopt the legal guidelines



provided by UNIDROIT. For giving a

formal shape to domestic factoring into

Bangladesh, government should amend acts

regarding the punishment of accused

party/parties involved in factoring. In order

to achieve success by increasing factoring

practices in Bangladesh, Bangladesh bank

and related ministries of government of

Bangladesh should arrange training

programs for officials of different

commercial banks and NBFIs. The officials

should motivate the business people to use

factoring as a financing tool for both

domestic and international business. For the

convenience of introduction of international

factoring in Bangladesh, the membership of

Bangladesh bank with international chain

like FCI must be ensured. Required

infrastructure and policy should be made to

introduce and promote this contemporary

financing and payment tool in Bangladesh.

As full-fledged practice of factoring has not

been started yet in Bangladesh, primary data

regarding the topic could not found and we

could not reached at a concrete proof that it

should be more beneficial than other

practicing methods. More analysis could be

done comparing different payment and

financing methods of business through

collecting primary data regarding this topic.

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.



LIST OF FIGUTRES

Fig 1 mechanism of domestic factoring (with recourse) source: Bangladesh bank, (modified by

authors)

Fig 2: mechanism of international factoring (pre shipment phase) source: Bangladesh bank,

modified by authors

1

2

6

83 5 7 8

Seller Buyer

Factor (4)

1

4 9 2 6 7 9

3

6

8

Importer Exporter

Import Factor

5

Export Factor



Fig 3 mechanism of international factoring (post shipment phase) source: Bangladesh bank,

modified by authors

Fig 4 The procedure of back to back Factoring

Flow of funds

Agreement

Product flow

1 3(a)

5 2 4(b)

3(b)

Customer Exporter

Distributor



Fig 5

0

100000

200000

300000

400000

500000

600000

700000

2009 2010 2011 2012 2013 2014 2015



LIST OF TABLES

Table 1 Total Factoring Volume 2010-2015

(In Millions of Euros)

2010 2011 2012 2013 2014 2015

World Domestic

Factoring

1,402,331 1,750,899 1,779,785 1,827,680 1,857,410 1,842,814

World

International

Factoring

245,898 264,108 352,446 402,798 590,114 530,189

World Total 1,648,229 2,015,007 2,132,231 2,230,477 2,347,513 2,373,003

Table 2 Factoring Volume in Asia Source: FCI Annual Review 2016

Year 2009 2010 2011 2012 2013 2014 2015

Volume(€) 209,863 355,463 507,694 571,528 599,297 614,994 562,988

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