With more than EUR 2.2 billion in value, the factoring market grew by 13 percent in the first semester compared to the same period in 2017, according to the latest study by the Romanian Factoring Association (ARF). The domestic factoring market grew by 14 percent to EUR 1.76 billion.
“This year, the market kept the growth trend from 2017, despite factors that had a negative impact on the economic sector, such as a steady decline in public investment, an increase in the benchmark (which cost the financing cost in the short run) the evolution of the exchange rate, the slowdown in population consumption. In the middle of last year, the growth was 12 percent over the same period of 2016,” explains Bogdan Rosu, president of the Romanian Factoring Association.
The analysis of the results, in terms of the typology of commercial transactions, revealed that the domestic factoring kept its growth rate of last year of 14 percent, in absolute amounts reaching a volume of EUR 1.76 billion. At the same time, the most spectacular growth was in export factoring, 21 percent, with almost EUR 73 million, as the same type of financing grew last year by only 3.5 percent.
“Export factoring has been steadily developing over the years, the benefits of insuring against the risk of default in international trade being clearly the main reason why these solutions are attractive to exporters,” says Bogdan Rosu.
Compared to the same period last year, import factoring reported a major decline, down by about 48 percent to just EUR 37.6 million. How, compared to the overall market level, this product has always been low, implicitly the number of transactions being low, the fluctuations were expected, the disappearance of a small number of commercial relations, which could have a significant impact on the volumes achieved in a certain period.
Domain FMCG – the “star” of internal factoring
From the point of view of the share of the domains in the structure of the domestic factoring market, the FMCG category continues to lead by 20 percent, registering an increase of 13.5 percent compared to the same period last year. The second place, in the same assessment, is the companies in the field named generically in ARF research “metals, chemicals, water, recycling”. Their share in the total factoring transactions is 16 percent, as they recorded a 70 percent increase over the same period last year. At stake, the third sector that is financed by factoring is “IT & C”, with a level of nearly 16 percent.
The “metals, chemicals, water, recycling” sector also contributes over 50 percent of the export factoring volumes and over 30 percent of the import factoring volumes respectively.
ARF research also confirmed that the profile of factoring companies remained roughly unchanged from last year. Thus, 39 percent are large firms with turnover over EUR 50 million, while companies in the SME area have a weight of 28 percent.
An important contribution to last year’s factoring market growth has also been the number of companies that have contracted new factoring facilities, which increased by 20 percent over the same period last year, financial institutions (banks and IFNs) which offer such products and the number of specialists involved in factoring operations by 15 percent.
The information for the factoring market valuation at the 6 months of 2018 was provided by the members of ARF – Access Financial Services IFN SA, Banca Comerciala Romana SA, BRD – Groupe Societe Generale SA, Banca Transilvania SA, EximBank, IFN Next Capital Finance SA , ING Bank Romania SA, Patria Bank, Piraeus Bank Romania SA, Raiffeisen Bank SA, Unicredit Bank SA, as well as other non-member financial institutions.