The factoring market has potential, but companies prefer classical lending products

factoring

“Any attempt to help investors, in the current economic context, is a positive step. I cannot say that factoring is a saving solution for companies. However, this does not mean that this product should be eliminated, but rather that it should be combined with other forms of lending,” Radu Gratian Ghetea, President of the Romanian Banking Association (ARB), said.

Erik Timmermans, Secretary General of International Factors Group (IFC), said that the Romanian factoring market surged 63.64 percent in 2008. This level places Romania in seventh position in a list of markets with the highest growth rates last year.

“The penetration rate in Romania is of 0.5 percent, far below the rate at the world level, of 3.45 percent, or below that in the EU, of 7.5 percent. If we consider this difference, we could say that the Romanian market growth potential is at least sevenfold,” Timmermans added.

Factoring is a way of financing by which a company is able to receive from a bank or a nonbanking financial institution the value of invoices which have not yet been paid by its clients.