The World of Factoring

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2 The World of Factoring Key Figures & Trends Challenges & Opportunities Important initiatives Erik Timmermans, rep. Secretary General IFG Warsaw 19 Sep 2013

3 Commercial Finance Today Asset Based Lending Invoice Finance Trade Finance Products Receivables & other Assets Without recourse Factoring Reverse Factoring Portfolio based With Recourse Factoring Invoice Discounting Portfolio & Transaction based Supply Chain Finance SWIFT BPO (Bank Payment Obligation) Transaction based Common in all forms of Commercial Finance: Secured and Monitored Financing

4 Evolution of World Factoring Turnover 1980 : +/- 50 billion 1990 : +/- 200 billion 2000 : +/- 600 billion 2012 : +/ billion The industry has grown 4 times faster than the World economy over the last 30 years

5 Factoring in the World 2012 Total World: billion (+8%) Source: IFG GIAR 2012 North America 91 (4%) South America 93 (4%) Europe (59%) (1.173 EU) Africa & Middle East 32 (2%) Asia 581 (28%) Australia & NZ 64 (3%)

6 Key Industry Figures Turnover 2012 : billion + 8 % compared to 2011 Approximately factoring companies But in USA and over 500 in Brazil Financed amount at year end : 309 billion Factoring Clients : Factoring Debtors : (rough estimate) Employees :

7 Market Structure Concentration : Bank dominated: Combined market share of 5 biggest factoring companies in each country On average 84% Combined market share of Top 5 in each country 49 % : bank subsidiaries 44 % : bank divisions

8 With or Without Recourse GIAR 2012 With Recourse 70 % Without Recourse 23 % Not specified 7%

9 Factoring Invoice Discounting GIAR 2012 Disclosed 70% Non-Disclosed 30%

10 Domestic - International GIAR 2012 Domestic 62% Export 24% Import 14%

11 Why is this industry important? Support for (in particular SME) business to develop and grow Support for export development Creating and supporting employment Efficient economic growth

12 Importance of Factoring The AR Factor study in 2011 from multinational GE estimated that in UK, DE, FR and IT 601,000 jobs are currently supported by factoring and commercial finance in these key markets That if optimal usage was made, an additional 282,000 jobs would be supported by 2015

13 Importance of Factoring As Bill Clinton might have said It s about the economy, stupid! Support for business Growth Employment

14 Challenges & Opportunities for the Industry

15 Opportunities Growth Potential : less than 2,5% of B2B payments financed through Factoring On the radar of Banks & Policy makers : open for SME financing at low risk Emerging Markets

16 Challenges Lack of awareness and acceptance Lack of Industry harmonization: Legal & regulatory environment Products & Terminology Loss of identity: Bank Departments often don t bother Insufficient training and networking

17 What does the Industry need most? Visionary Leaders!

18 Role of IFG

19 IFG s Manifesto 1. We aim to create the international representative body for Factoring and Commercial Finance in both emerging and established markets worldwide. 2. Our global network facilitates trade, provides education, knowledge share and best practice nationally, regionally and internationally. 3. We connect service providers with members and align with like-minded organisations to facilitate broader industry reach. 4. We lobby on behalf of the industry we promote and represent the industry, working closely with regulators and governments worldwide.

20 Important Initiatives Strategic Alliance IFG CFA (USA): Harmonizing advocacy & promotion for the industry Global Industry Standards (legal, terminology, best practices ) The first University Certificate of Financing International Trade: Cooperation University of Malta FIMBank IFG 6 weeks intensive learning 1 week on Commercial Finance included (previously IFG Academy)

21 E-learning in English, Russian and Spanish Now available And Polish?

22 E-learning course Based on 50 years of International Best Practices Available from everywhere in the world : interactive e-learning 5 Modules: Basic Concepts and different Products Why Companies need Factoring How to develop new business Client and Risk Management International Aspects Test after each Module / Exam and Certificate at the end Cost effective (350,00 for IFG Members 700,00 for non-members)

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24 Forthcoming Events Annual Meeting New Delhi, India, 6-10 October Supply Chain Finance & Asset Based Lending Conference, Istanbul Turkey, October CFA Annual Convention in Los Angeles, USA, November IFG moderates International Panel & hosts an International Lounge Area

25 Thank you for your attention! Questions? More info on