The factoring market

On a worldwide scale, almost a thousand companies currently offer factoring services, of which 435 are in Europe (Sources: Factor Chain International).
The factors, namely the companies operating in this market, are usually subsidiaries of banking groups, financial institutions, insurance companies or manufacturing firms, and rarely independent companies.

The current internationalisation of the market is reflected in a growing trend towards buyouts and mergers in a sector still dominated by essentially national agents.
The diverse nature and current demands of businesses that use factoring are currently contributing to the emergence of new services and ever-increasing incorporation of new technologies.

Figures for 2009

Factoring in Europe, International Factoring, The history of factoring

Factoring in Europe

Following the general slowdown of activity, the European factoring market fell for the first time, from 8.4% in 2009. The weight of Europe in the global factoring market is slowing slightly, from 68.0% to 67.5%.

Growth of the European market (€ billion)

Source : compilation Eurofactor (Production of factoring companies on European market in Md€)

International Factoring

International Factoring, however, continues to grow (2%), although slower than in 2008 (+21%). Its share in total (13.1%) is higher than in the U.S. (7%), but less than in Asia (19%).

Volume and relative weight of international factoring (€ billion)

Source : compilation Eurofactor (Production of factoring companies on European market in Md€)

The history of factoring

The 60's witnessed the birth of factoring in the domestic market

Factoring started in the United States, and then, as a result of pressure from joint ventures between American factoring companies and local partners, it rapidly became established in western European countries in the middle 60's.

The 70's witnessed a rapid growth in factoring

For a good many companies, economic crisis and mass bankruptcy are synonymous with a need for greater security. In such crises, factoring companies then bring the necessary guarantee of secure customer account management.
At the same time, the growth of international trade was no longer restricted solely to multinationals, but also involved many more modestly-sized businesses which found in export factoring a simpler and risk-free solution for their business development needs.

The 80's was the decade when factoring matured and developed

The factoring market experienced a boom associated with a new functional approach on the part of the main factors - growth and vigour in commercial processes, the emergence of new international networks, flexibility and customisation and new customer services.

Today, growth and mutual trust

Although the late 80's were characterised by a slight stagnation in the factoring business worldwide, the market is now experiencing renewed vigour. There are several reasons for this:

Companies have a better understanding of the services and benefits factoring can provide
Constant innovation, the guarantor of varied services which are regularly updated to suit company needs
The boom in the outsourcing of accounts receivable management

A growth in factoring at international level