Exciting News on the Record Growth in Global Factoring in 2022 at RFIx

I was honored to again participate in and be an invited speaker at RFIx, the most important and largest Annual Conference for the Global Factoring Industry in the world. Held this year in London at the Canary Wharf offices of the global law firm Clifford Chance, I spoke on how to Effectively, Ethically yet Carefully Utilize AI and GenAI in a Global Factoring Firm.

RFIx is the Global Factoring industry’s largest and leading event, attracting experts, speaker and delegates from across the globe; bringing together market leaders and new entrants; providing an essential update on the latest invoice financing trends, market challenges, and financial innovation; as well as excellent networking opportunities. I have attended and spoken at over 15 RFIx Conventions dated back as far as the one I first attended in Hong Kong in 2005.

This year’s RFIx was headlined “Growth Against All Odds” and had over 50 speakers and experts covering 20+ topics of interest to the Global Factoring Industry. Speakers include Executives from Kata Executive Consulting, World Trade Organization, NYU Solomon Center for the Study of Financial Institutions, Barclays, Santander Corporate & Investment Banking, Citi, Accelerated Payments, Casterman Advisory, ITFA, Lloyds Bank, Demica, Traxpay, Sullivan & Worcester, The Washington Post, Novicap, Banca IFIS SpA, FCI, EBRD, SMBC Bank International, Pemberton Asset Management, Tradeteq, Reed Smith, Fitch Ratings, Real Economy Fund, SCHUUMANN, Allianz Trade UK & Ireland, WTW, Marsh Trade Credit, Comark, CODIX Group, Global Supply Chain Finance Group, Qualco, Bank of China Limited, Beacon, Societe Generale, efcom, Dancerace, Lendscape, Equinit RiskFactor, Veefin Solutions, IBM, Liberis, Stabiliti and others.

Finally, it is great to see, meet and network with leaders and professionals at RFIx from nearly every corner of the globe. Attendees came from over twenty-five countries including Canada, The United Kingdom, Ireland, Spain, Germany, Belgium, Bulgaria, France, Czech Republic, Poland, Ukraine, Italy, Kosovo, The United States, Austria, UAE, Uzbekistan, Romania, Greece, The Netherlands, Switzerland, India and Nigeria.

Without any question, the most exciting news at RFIx was the announcement by FCI leader Peter Mulroy that the Global Factoring Industry grew at a record pace in 2022. The Press Release issued about this great news written and published by FCI is reproduced below.

“FCI, the global representative body for factoring and financing of open account domestic and international trade receivables, has released their annual World Factoring Statistics report.

The report highlights that the factoring and receivables finance industry once again grew at a double-digit rate. 2022’s increase of 18.3% surpasses 2021’s growth of 12.3%. It is estimated that this industry grew by €3,659 billion in 2022.

The year 2022 witnessed an unprecedented growth, setting a historical precedent as the industry experienced the largest single-year increase in volume. The remarkable growth of more than €590 billion YOY solidifies its position as the biggest increase ever reported. This achievement can be attributed to the recovery from COVID-19, substantial government stimulus, a surge in pent-up consumer demand, and the subsequent increase in inflation.

Examining the past two decades, including the robust growth witnessed in 2022, the compounded annual growth rate reached an incredible 8.83%. Domestic and international factoring experienced substantial growth during this 20-year period.

Europe

Europe, which once again was the largest contributor to the industry, represented 68% of global volume. In 2022, the European region contributed €2,499 billion, which is an increase of 18% from 2021. The five largest markets included:

1.????Spain, with an increase of 30%,

2.????Germany, with an increase of 20%,

3.????Italy, with an increase of 14%,

4.????France, with an increase of 15%,

5.????United Kingdom, with an increase of 8%.

However, multiple markets exceeded growth expectations, including Ukraine (130%), Lithuania (67%), Serbia (57%), Turkey (51%), Cyprus (50%), Bulgaria (49%), Georgia (34%), Greece (33%), and Romania (31%).

Asia Pacific

The Asia Pacific region represents approximately 24% of global volume with €881 billion, which experienced an increase of 17% over 2021.?

Within the region, Greater China, including Mainland China (23%), Hong Kong (2%), and Taiwan (2%), accounts for a volume of €671 billion. India demonstrated explosive growth with a growth rate of +83.4%, reaching €15.7 billion, following the implementation of a robust legal and regulatory framework.

Singapore also displayed substantial growth of 52%, reaching €44 billion. On the other hand, Japan witnessed a decrease of 2%, amounting to €57 billion.

The Americas

The Americas region continued its upward trajectory from 2021, with a remarkable growth rate of 47%. In terms of market share, the Americas represent 6% of the total world factoring volume, with an overall figure of €228 billion.

South and Central America, comprising 3% of the total world factoring volume with €124 billion, witnessed a significant increase of 44%. The top three players in this region are:

1.????Mexico, with an increase of 112%

2.????Chile, with an increase of 41%

3.????Brazil, with an increase of 33%

North America, with a nearly 3% share of the total world factoring volume (€104 billion), demonstrated notable improvement, increasing by 7% compared to 2021. Canada witnessed a growth of 15%, while the USA experienced a 7% increase.

Africa and Middle East

Africa accounted for 1% of the total world factoring volume in 2022, amount to €41 billion, indicating a significant growth rate of 29% compared to 2021, which is consistent with the previous year’s increase.

South Africa, the largest market in the continent, contributes to over 80% of the entire volume and witnessed a staggering increase of 38%, solidifying its position as a market with strong growth prospects in the foreseeable future.

The Middle East, representing 0.3% of the global factoring volume, experienced a 2% increase compared to 2021. The most notable growth was observed in Israel, with a 5% increase.

Resilience of the factoring industry

Despite the continuation of a challenging global environment, the results of the FCI market survey for 2022 demonstrated the strength and resilience of the factoring and receivables finance industry. With an impressive growth rate of 18.3% over 2021, the industry has confirmed the expected return to normalcy. Concerns expressed a year ago, including the impact of increased credit risk in the second half of 2022 due to the withdrawal of state support, rising inflation and interest rates, the conflict in Eastern Europe, and the ongoing effects of the pandemic, particularly felt in Asia, have not been reflected in the industry’s statistics.

On the contrary, the significant increase in volume signifies the vital role played by the industry in supporting SMEs and corporates globally. It will undoubtedly be remembered as the most prosperous year of the century. As the global economy continues to recover and adapt to the changing landscape, factoring and receivables finance will remain a critical component of the financial ecosystem, offering valuable solutions for businesses of all sizes.

The collaboration between FCI members, strategic stakeholders, and industry participants worldwide will continue to shape the landscape of factoring and receivables finance, enabling businesses to thrive and succeed in an increasingly interconnected and dynamic global marketplace.

The original report was published by?FCI.”

I look forward to participating in many future BCR Events and next years’ RFIx that will again be held in London at Clifford Chance in May 2024.