The factoring market dropped with over 5% last year, to EUR 2.7 billion
The factoring market added up to EUR 2.72 billion last year, with a 5-6% drop as compared to 2012, provided that export factoring showed a slight increase and the import factoring decreased, according to the Romanian Factoring Association (ARF).
“This is a hopeful evolution considering that at the middle of last year there was a 16% drop as compared to the same period in 2012. The market managed to recover its volumes in the second half of the year when, traditionally, companies show a greater interest in factoring. However, at the same time, this evolution reflects once more the prudent manner in which banks and non-banking financial institutions can support Romanian companies through factoring products, given the indecisive economic context in which companies that become insolvent continue to grow”, stated Bogdan Rosu, ARF President, in a press release.
Factoring contracts assure a liquidity of receivables with a longer collection period or with higher non-collection risks, for a certain cost.
Export factoring registered a slight increase as compared to last year, while import factoring suffered a drop, following the general downward evolution of imports in 2013. Regarding the percentage of the fields which the companies accessing internal factoring belong to, the highest level, 32.8%, was registered in constructions, mainly due to projects from the public sector. In this area of constructions, there is even an increase compared to last year, when the level was 28% of the total fields resorting to factoring.
“As I also specified last fall, although one of the areas with potential for factoring demands is represented by companies that have concluded contracts with public entities, we are reserved in terms of a continuing positive evolution for this sector in 2014, as well. And this is because we are considering the forecast investment level, as well as the consequences of the modifications brought by a new legislative project on the law regulating the establishment and operation of the C.N.A.D.N.R. Here we refer mainly to a limitation of subcontractor access to financing, by dissolving clear payment deadlines and conditioning collections, elements which disqualify such contracts for financing through factoring”, added Rosu.
ARF data also shows that the percentage of the pharma sector in accessing internal factoring increased from 1% in 2012 to 5.4%, supported, as well, by the first club-type factoring facility in Romania, while the percentages for the agricultural and foods sectors and automotive and equipment suffered slight contractions.
In terms of the turnover of the companies accessing factoring, if in 2012 financing through factoring seemed to be the prerequisite of companies with turnovers of over EUR 5 million, last year, a consistent increase was observed for companies with turnovers under EUR 5 million, included in the SME category.
“In 2012, the volumes managed by these companies through factoring were only at 16.3%, last year their level grew to 25%. This evolution is a natural one and it is also a return to the situation registered on the factoring market in 2011, showing once more the willingness of banks and non-banking financial institutions to support SMEs through factoring facilities”, added Rosu.
ARF members are Access Financial Services, BCR, BRD – Groupe Societe Generale S.A., Banca Transilvania, IFN Next Capital Finance, ING Commercial Finance IFN, RBS Bank, Raiffeisen Bank, Romfactor, Unicredit Ţiriac Bank, as well as other five non-member financial institutions.