Factoring Business in India: Beyond Banking

Size: px
Start display at page:

Download "Factoring Business in India: Beyond Banking"

Transcription

1 CORPORATE LAW RESEARCH GROUP Factoring Business in India: Beyond Banking CORPORATE IN-FOCUS A Note on Banking Business in India Note: This research report is a product of the research conducted at Corporate Law Research Group (CLRG), Faculty of Law, Dr. Shakuntala Misra National Rehabilitation University, Lucknow and does not correspond to the views of any other author, reporter or columnist. This research paper is intended towards academic uses only and does not offer professional advice or opinion.

2 1.] Factoring business- A brief Corporate Perspective Factoring is a transaction in which a business sells its accounts receivable, or invoices, to a third party commercial financial company, also known as a factor. This is done so that the business may receive cash more quickly than it would by waiting 30 to 60 days for a customer payment. Factoring is sometimes called accounts receivable financing. The origin of factoring goes back to the 14th century in England. Earlier factoring was limited to textile and garment industries but later spread across various industries and markets. Though Europe provides largest volumes globally, factoring in Asia has been growing rapidly in the last few years. The purpose factoring is to assign the account receivables to be able to: Instantly convert receivables into cash, that enables the companies to have funds to finance the day to day operations of the company, Helps in efficient collection of receivables and protection against bad debts, Outsourcing sales ledger administration and, Availing credit protection for receivables. In India, however, in the absence of legal framework regulating factoring for so long, it has played a limited role in business financing. India s factoring business in 2012 was around 3500 million Euros in domestic and 3650 million Euros in total as compared to a total of 21,32,231 million Euros worldwide. The Indian factoring volume has grown approx 38% from However, India s factoring stands at mere 0.17% vis-a-via worldwide factoring volume. Some of the challenges the factoring companies in India faced were: No specific law for the assignment of debt, No recovery forums available to the factoring NBFCs viz.drt or SARFAESI Act, Lack of access to information on the basis of credit worthiness and Assignment of debt involves heavy stamp duty cost. Some of these issues were addressed while the factoring regulation was coming into effect in There is a very slight difference between factoring and bill discounting. Bill discounting unlike factoring is always in recourse to a client whereas, factoring can be and can also be done without a client even. There are different types of factoring such as full factoring (without recourse factoring), recourse factoring, maturity factoring, advance factoring, invoice discounting, bulk factoring, agency and export factoring.

3 2.] Issues In-focus Over the years, the Indian economy has gone phases of transformation. After witnessing the Hindu rate of growth for the first three decades of post independence, the Indian economy got its first push with the first economic phase reform in 1980s while the second major push came in 1991, following liberalisation of the economy, which helped it to move towards a sustainable higher growth trajectory. India made a radical break in 1991 from its previous policies of inward orientation and started a process of opening up to foreign and trade investments. 01. Like the other emerging market economies of the world, the Indian economy is also facing certain challenges such as high inflation, less growth, slowing down of investment, current account deficit is above sustainable levels, high fiscal deficit, and exchange rate under pressure. While global slowdown is an important factor, domestic factors are no less important. An important point to note is that in the recent period growth has become broad-based, in many states of India, poverty has declined but financial inclusion has become a major concern. Going forward,there are some ongoing challenges likeproviding world class infra-structure for rapidly growing economy, particularly in power and telecom sectors, and macro- economic management involving fiscal reform and monetary policy in the context of the open economy. 02. In the years to come, it is expected that millions of people in India may move out of the agricultural sectors and jobs will have to be provided to them. Therefore, India needs to increase its manufacturing capacities, though in the recent past the growth of the manufacturing sector has outpaced the overall growth rate of the economy, at just 16% of the GDP, therefore the contribution of the manufacturing sector is below its potential. The National Manufacturing Policy announced by the government of India proposes to increase sectoral share of Manufacturing in GDP to 25% over a decade. 03. Notwithstanding the growth in number of branches opened by banks, still Indian banking sector has to reach the desired level of banking penetration and inclusion as observed in the most advanced and emerging economies. Regionally, north-eastern, eastern and central regions are more excluded in terms of banking penetration. The assessment and comparison with other economies brings need imparting dynamism in expanding the commercial banking system in terms of its size and number; need to focus on consolidation; need to relax barriers entering to improve the competition; and need for enhancing operational efficiency.

4 3.] Strategies In-focus 01. While the concept of factoring may be new to the business owners, factoring as means of financing has been there for centuries depending upon the availability of traditional bank financing there seems to be resurgence interest in factoring business. It is a way by how the businesses generate cash by selling out their receivables to the third party called factor. The advantage of this to business is that it gets cash from the sale immediately and need not to wait for the receivables to be collected. Factoring is different from bank financing as it solely looks to the accounts receivable as a security, whereas in addition to accounts receivable, bank financing considers other assets as collateral. The other assets typically considered by the banks are inventory, real property and equipments. Importantly, factoring is a sale of financial assets. 02. The life blood of any organisation is its cash flow therefore, it stands that irregular flow of finance can spell potential disaster to a company that fails to implement the systems and processes of necessary to maintain healthy flow of funds. Alternatively, many of them resort to debt or equity to generate necessary flow of funds. Considering small business contributes more than one third of the nation s GDP, 15% of the export market, it is clearly economically unviable for the SME sector to carry the responsibility of slow payers. In response, many SME operators are taking a leaf out of the UK market, and adopting alternative cash flow management measures to avoid the significant pitfalls of fund shortages. 03. Business growth requires a solid foundation and it is built on powerful risk management. Fortunately for SMEs, industries have been developed to manage the risks. These industries have developed processes, software and procedures that are accessible to all. 04. Many factoring facilities impose minimum balances. If sales cycle is lumpy, the situation may end up where paying fee/interest despite having no outstanding accounts payable. Set-up costs, handling fees, interest rate, relationship costs, all have to be considered as a whole. In closing, the use of factoring to obtain the cash needed to accommodate a firm s immediate cash needs to be allowed by the firm to maintain a smaller ongoing cash balance. By reducing the size of its cash balances, more money is made available for the firm s growth. It is useful to have a lot of accounts receivable with different credit terms to manage. However, proper care has to be taken at the nature of the business and the total costs that a factoring relationship can incur to determine if it is right for the business.

5 4.] Regulation In-focus 01. In order to revive the business and render liquidity specially to the small and medium enterprise, in the last session of Parliament the finance minister has tabled a pilot bill to bring the factors business in India under regulation. While the intention would have been to stimulate the growth of factoring business in India, but looking close to the bill does not enumerate so. It is a regulation bill, but the need is to promote factoring and not so much to regulate. 01. The Regulation of Factor (assignment of receivables) Bills, 2011, given the fact that several other important bills have taken years to ascend into the statute book, factoring bill has really been commendably quick to progress. Factoring business was a mushrooming business which needed to be regulated. Factoring is an idea that the RBI has been meaning to promote over decades, and there has not been any substantial pick up in factoring volumes over the years. It is exactly the model that RBI used while passing the Securitisation Act- with the idea to promote securitisation, under this act. 02. The government s efforts at promoting factoring date back to 1988 when the RBI appointed Kalyan sundaram Committee. RBI allowed banks to enter factoring by notification in However, some of the banks did respond by starting factoring companies- SBI factors, Canbank factors etc. were started. Factoring volumes in India have not been significant enough, and unlike other facets of NBFC activity, factoring business has not drawn foreign players to any appreciable extent, except recently when some foreign banks have begun factoring services. 03. While factoring might have picked up much, receivables financing has continued to grow with growth of the NBFC sector. As a part of asset-based financing toady NBFC sector views receivables as a part of tangible assets. Discounting is common as a mode of salesaid financing several software and hardware vendors provide the facility to instalment or deferred payments to their clients and in turn sell the receivables to finance companies.

6 All Rights Reserved CLRG Report Prepared at: Corporate Law Research Group Published on: 09 February 2015 (Monday) RESEARCH & ANALYSIS TEAM Chairman Research Advisor Research Coordinator Mr. Shail Shakya, Group Chairman, CLRG Mr. Prashant Singh, Senior Associate (Research), CLRG Ms. Vishakha Gupta, Senior Associate, CLRG Mr. PSS Bhargava, Senior Associate, CLRG Research Associates Ms. Shivali Misra, Associate, CLRG Mr. Sarvesh Sen, Associate, CLRG Ms. Saumya Prajapati, Associate, CLRG Ms. Nainshi Srivastava, Associate, CLRG Ms. Isha kabra, Associate, CLRG Ms. Kudrat Agrawal, Associate, CLRG Mr. Shubham Tripathi, Associate, CLRG Mr. Kartikeya Tiwari, Associate, CLRG For Queries: Website:

Legal Updates. Legal Issues on factoring business in India. Nidhi Bothra nidhi@vinodkothari.com. Vinod Kothari & Company

Legal Updates. Legal Issues on factoring business in India. Nidhi Bothra nidhi@vinodkothari.com. Vinod Kothari & Company Vinod Kothari & Company Legal Issues on factoring business in India Nidhi Bothra nidhi@vinodkothari.com Vinod Kothari & Company Credit Factoring or simply factoring is an asset backed means of financing

More information

Discounting. Factoring & Forfeiting Summary

Discounting. Factoring & Forfeiting Summary Chapter 7 Discounting. Factoring & Forfeiting Summary The financial service sector is developing at rapid pace in India. This is just because of the emerging needs of the economy. Many innovative schemes

More information

Discounting, Factoring & Forfeiting

Discounting, Factoring & Forfeiting Discounting, Factoring & Forfeiting Introduction Bill Discounting Factoring- Meaning & Definition Modus Operandi Terms of Agreement Functions Types of Factoring Factoring Vs Discounting Cost of Factoring

More information

Model Answer. M.Com IV Semester. Financial market and financial services. Paper code- AS 2384

Model Answer. M.Com IV Semester. Financial market and financial services. Paper code- AS 2384 Model Answer M.Com IV Semester Financial market and financial services Paper code- AS 2384 1. (I) Money Market is a market for short term loans or financial assets. As the name implies it does not deal

More information

SME: Finance -Challenges & Opportunities- Factoring Services- A non-conventional option

SME: Finance -Challenges & Opportunities- Factoring Services- A non-conventional option IFCI Factors Limited SME: Finance -Challenges & Opportunities- Factoring Services- A non-conventional option 1 India s SME Scenario Indian SMEs account for almost 45 percent of industrial output and 40

More information

THE CONCEPTUAL FRAMEWORK OF FACTORING ON SMALL AND MEDIUM ENTERPRISES

THE CONCEPTUAL FRAMEWORK OF FACTORING ON SMALL AND MEDIUM ENTERPRISES THE CONCEPTUAL FRAMEWORK OF FACTORING ON SMALL AND MEDIUM ENTERPRISES Minaxi Rani Assistant Professor (Extn.), Department of Commerce, Govt. College for women P.G. College, Hisar, Haryana, (India) ABSTRACT

More information

Table 1.1 TOTAL FACTORING VOLUME BY COUNTRY IN THE LAST 10 YEARS (MILLIONS OF EUROS)

Table 1.1 TOTAL FACTORING VOLUME BY COUNTRY IN THE LAST 10 YEARS (MILLIONS OF EUROS) INTRODUCTION Factoring is a financial option for the management of receivables. In simple word it is the conversion of credit sales into cash. In factoring, a financial institution (factor) buys the accounts

More information

Subject. PAPER No. : Financial Management MODULE No. : Factoring services

Subject. PAPER No. : Financial Management MODULE No. : Factoring services Subject Paper No. and Title Module No. and Title Module Tag Paper No.8: Financial Management Module No. 36: Factoring services COM_P8_M36 TABLE OF CONTENTS 1. Learning outcomes 2. Introduction 3. Mode

More information

Factoring in Turkey. Çağatay Baydar General Manager of TEB Faktoring A.Ş. Vice Chairman of FCI

Factoring in Turkey. Çağatay Baydar General Manager of TEB Faktoring A.Ş. Vice Chairman of FCI Factoring in Turkey Çağatay Baydar General Manager of TEB Faktoring A.Ş. Vice Chairman of FCI Factoring in Turkey First factoring company established in 1990 Today; around 75 factoring companies Minimum

More information

Factoring and Forfaiting

Factoring and Forfaiting Factoring and Forfaiting -A fund/fee based financial service Prof. Nishant Dhruv, What is Factoring? Definition: Factoring provides resources to finance receivables as well as facilitates the collection

More information

Meaning & Definitions Aspect of Credit Management Objectives of Accounts Receivables Management Advantages of Trade Debtors Management Costs of

Meaning & Definitions Aspect of Credit Management Objectives of Accounts Receivables Management Advantages of Trade Debtors Management Costs of Management of Accounts Receivable Meaning & Definitions Aspect of Credit Management Objectives of Accounts Receivables Management Advantages of Trade Debtors Management Costs of Maintaining Accounts Receivables

More information

IFGL REFRACTORIES LTD. RESULT UPDATE PRESENTATION, February 2016

IFGL REFRACTORIES LTD. RESULT UPDATE PRESENTATION, February 2016 IFGL REFRACTORIES LTD RESULT UPDATE PRESENTATION, February 2016 Safe Harbor This presentation and the accompanying slides (the Presentation ), has been prepared by IFGL Refractories Limited (the Company

More information

International Trade Financing and Risk Management Manual

International Trade Financing and Risk Management Manual International Trade Financing and Risk Management Manual Website: www.aepcindia.in For query please contact: Ms. Vanni Mehta, ecocell@aepcindia.com Incorporated in1978, (AEPC) is the official body of apparel

More information

THE RETURN OF CAPITAL EXPENDITURE OR CAPEX CYCLE IN MALAYSIA

THE RETURN OF CAPITAL EXPENDITURE OR CAPEX CYCLE IN MALAYSIA PUBLIC BANK BERHAD ECONOMICS DIVISION MENARA PUBLIC BANK 146 JALAN AMPANG 50450 KUALA LUMPUR TEL : 03 2176 6000/666 FAX : 03 2163 9929 Public Bank Economic Review is published bi monthly by Economics Division,

More information

INTERNATIONAL FACTORING A VIABLE FINANCING SOLUTION FOR FIRMS

INTERNATIONAL FACTORING A VIABLE FINANCING SOLUTION FOR FIRMS Finances - Accounting INTERNATIONAL FACTORING A VIABLE FINANCING SOLUTION FOR FIRMS Assoc. Prof. Ph.D Giurc Vasilescu Laura University of Craiova Faculty of Economy and Business Administration, Craiova,

More information

Receivables Finance International 2006 Madrid 16.03.2006

Receivables Finance International 2006 Madrid 16.03.2006 Receivables Finance International 2006 Madrid 16.03.2006 Breathing new life into the German factoring market Klaus Taube General Manager EUROFACTOR AG Crédit Agricole Group 1 Premier partner for receivable

More information

ANNUAL REPORT OF CAMBRIC MANAGED SERVICES

ANNUAL REPORT OF CAMBRIC MANAGED SERVICES ANNUAL REPORT OF CAMBRIC MANAGED SERVICES CAMBRIC MANAGED SERVICES INC. Directors of the Company 1 Directors Report 2-3 Financial Statements 4-5 Notes forming part of Financial Statements 6-10 CAMBRIC

More information

P R E S S R E L E A S E

P R E S S R E L E A S E Hong Kong, May 22, 2013 Survey reveals corporate overdue payment in Asia Pacific region deteriorated in 2012 - Companies are less optimistic about recovery of global economy in 2013 A survey of corporate

More information

A CONSOLIDATED VERSION OF THE PUBLIC DEBT MANAGEMENT ACT

A CONSOLIDATED VERSION OF THE PUBLIC DEBT MANAGEMENT ACT M. OOZEER A CONSOLIDATED VERSION OF THE PUBLIC DEBT MANAGEMENT ACT 14 May 2015 2 A CONSOLIDATED VERSION OF THE PUBLIC DEBT MANAGEMENT ACT Act No. 5 of 2008 [Amended 14/2009, 10/2010, 36/2011, 38/2011,

More information

Schemes for Financing Micro, Small and Medium Enterprises

Schemes for Financing Micro, Small and Medium Enterprises Schemes for Financing Micro, Small and Medium Enterprises Background The Small Scale Industries Sector, redefined since 2006 as the Micro Small and Medium Enterprises Sector has played a seminal role in

More information

Recent Developments in Small Business Finance

Recent Developments in Small Business Finance April 1 Recent Developments in Small Business Finance Introduction In 1, a Small Business Panel was formed by the Reserve Bank to advise it on the availability of finance to small business. At about the

More information

PRESENTATION ON FACTORING BY GLOBAL TRADE FINANCE LIMITED 19.06.2007. Global Trade Finance Ltd

PRESENTATION ON FACTORING BY GLOBAL TRADE FINANCE LIMITED 19.06.2007. Global Trade Finance Ltd PRESENTATION ON FACTORING BY GLOBAL TRADE FINANCE LIMITED 19.06.2007 o Incorporated in March 2001 o o o o ABOUT GTF India s first International Factoring Company RBI has accorded registration and Authorised

More information

NATURE OF FACTORING. www.factors-chain.com/home www.factoring.org

NATURE OF FACTORING. www.factors-chain.com/home www.factoring.org NATURE OF FACTORING www.factors-chain.com/home www.factoring.org A US DEFINITION: a continuing arrangement between a factoring concern and the seller of goods or services on open account, pursuant to which

More information

Salvatore Zecchini Chairman OECD Working Party on SMEs and Entrepreneurship

Salvatore Zecchini Chairman OECD Working Party on SMEs and Entrepreneurship FOSTERING SMEs AND ENTREPRENEURSHIP FINANCING AFTER THE CRISIS Confindustria - OECD MiSE - Roma 7th July 2014 Salvatore Zecchini Chairman OECD Working Party on SMEs and Entrepreneurship 1 Six years after

More information

Government and public sector debt measures

Government and public sector debt measures Introduction Government and public sector debt measures 1. One measure of governments performance in managing the public finances is the level of public sector debt. The definition and responsibilities

More information

2014 HALF YEAR RESULTS 4 September 2014

2014 HALF YEAR RESULTS 4 September 2014 862m H1 2014 Revenues 2014 HALF YEAR RESULTS 4 September 2014 57% of Revenues for International in H1 2014 21,657 Employees In H1 2014 Disclaimer This presentation contains forward-looking statements (as

More information

The Nature, Elements and Importance of Working Capital

The Nature, Elements and Importance of Working Capital C. WORKING CAPITAL MANAGEMENT 1. The nature, elements and importance of working capital 2. Management of inventories, accounts receivable, accounts payable and cash 3. Determining working capital needs

More information

Public debt management and open market operations in Brazil

Public debt management and open market operations in Brazil Public debt management and open market operations in Brazil Luiz Fernando Figueiredo, Pedro Fachada and Sérgio Goldenstein 1 1. Public debt management An inflation targeting regime was introduced in Brazil

More information

FRANKLIN ELECTRIC REPORTS RECORD SECOND QUARTER 2013 SALES AND EARNINGS

FRANKLIN ELECTRIC REPORTS RECORD SECOND QUARTER 2013 SALES AND EARNINGS For Immediate Release For Further Information Refer to: John J. Haines 260-824-2900 FRANKLIN ELECTRIC REPORTS RECORD SECOND QUARTER 2013 SALES AND EARNINGS Bluffton, Indiana July 30, 2013 - Franklin Electric

More information

The Complete Guide to Freight Invoice Factoring Everything you need to know to get your cash flowing. A White Paper by Concept Financial Group

The Complete Guide to Freight Invoice Factoring Everything you need to know to get your cash flowing. A White Paper by Concept Financial Group The Complete Guide to Freight Invoice Factoring Everything you need to know to get your cash flowing A White Paper by Concept Financial Group What is Factoring? Factoring FAQs According to the Business

More information

2011 Meridian Partners Limited. Meridian Partners Trade Financing

2011 Meridian Partners Limited. Meridian Partners Trade Financing Meridian Partners Trade Financing About Us Meridian Partners provides you with the legal requirements of a registered office address in Hong Kong, a corporate secretary, telephone, fax and mailing services.

More information

Apple Capital Group, Inc.

Apple Capital Group, Inc. COMMERCIAL FINANCE Commercial finance typical revolves around what are considered the assets of your business and are often called "asset based loans". The assets of your business are things such as your

More information

Business Financing for Foreign Investors in India

Business Financing for Foreign Investors in India Business Financing for Foreign Investors in India Kuala Lumpur-September 25, 2008 at 3.00 pm Address by Mr. Rakesh Shah, Chairman, EEPC India It is a privilege to be in the midst of this distinguished

More information

Finance Ministers Speech NDTV Profit Business Leadership awards 2011

Finance Ministers Speech NDTV Profit Business Leadership awards 2011 Finance Ministers Speech NDTV Profit Business Leadership awards 2011 Ladies and Gentlemen, I am very happy to be here today among this distinguished gathering of industrialists and business persons on

More information

Accounts Receivable and Inventory Financing

Accounts Receivable and Inventory Financing Accounts Receivable and Inventory Financing Glossary Accounts Payable - A current liability representing the amount owed by an individual or a business to a creditor for merchandise or services purchased

More information

Software Testing Market India

Software Testing Market India Software Testing Market India July 2014 Executive Summary Market Software Testing market in India was valued at ~ INR xx bn in 20-- and is projected to grow at a CAGR of ~ x1% between 20--- and 20-- Over

More information

Factoring and forfaiting. International financial settlements 120881-1165

Factoring and forfaiting. International financial settlements 120881-1165 Factoring and forfaiting 1 Factoring Factoring is a transaction where the exporter sells its receivables to an institution The factoring institution buys the receivables without recourse Due to increased

More information

Factoring: A n Effective Financing Option to SMEs in China

Factoring: A n Effective Financing Option to SMEs in China Factoring: A n Effective Financing Option to SMEs in China FENG Yue Economics and Management Department, Nanjing Institute of Technology, P.R.China, 211167 fengyue@njit.edu.cn Abstract: Factoring is a

More information

LESSON 13: FACTORING THEORETICAL FRAMEWORK

LESSON 13: FACTORING THEORETICAL FRAMEWORK LESSON 13: FACTORING THEORETICAL FRAMEWORK Lesson Objectives To understand the Concept of Factoring. Methodology of Factoring and Forfeiting. Types of factoring. Introduction Receivables constitute a significant

More information

It is concerned with decisions relating to current assets and current liabilities

It is concerned with decisions relating to current assets and current liabilities It is concerned with decisions relating to current assets and current liabilities Best Buy Co, NA s largest consumer electronics retailer, has performed extremely well over the past decade. Its stock sold

More information

ANNUAL REPORT OF MIDWEST MANAGED SERVICES

ANNUAL REPORT OF MIDWEST MANAGED SERVICES ANNUAL REPORT OF MIDWEST MANAGED SERVICES MIDWEST MANAGED SERVICES INC. Directors of the Company 1 Directors Report 2-3 Financial Statements 4-6 Notes forming part of Financial Statements 7-11 MIDWEST

More information

Customer financing in Brazil Guide for a Finnish SME exporter

Customer financing in Brazil Guide for a Finnish SME exporter Customer financing in Brazil Guide for a Finnish SME exporter Contents Financial markets 2 Know your customer 3 Prepayments received from the buyer 4 Granting payment terms with invoice 5 Bills of exchange

More information

India s Economic Reforms

India s Economic Reforms ERD POLICY BRIEF SERIES Economics and Research Department Number 2 India s Economic Reforms What Has Been Accomplished? What Remains to Be Done? Arvind Panagariya Asian Development Bank http://www.adb.org

More information

EXPORTER S SOUK EVENT FOUR SEASONS 4/23/2015 1

EXPORTER S SOUK EVENT FOUR SEASONS 4/23/2015 1 EXPORTER S SOUK EVENT FOUR SEASONS 4/23/2015 1 FACTORING Factoring is a financial transaction whereby a company sells its receivables to a Third Party (Factoring Company) at a discounted rate. Not a loan

More information

Net Sales. Cost of Sales, Selling, General & Administrative Expenses, and Operating Income

Net Sales. Cost of Sales, Selling, General & Administrative Expenses, and Operating Income Net Sales In the fiscal year ending March 31, 2002 (fiscal 2001), the Fujitsu Group faced a difficult global economic environment, with the impact of the slowdown in the U.S. economy reverberating throughout

More information

EXTERNAL COMMERCIAL BORROWINGS & TRADE CREDITS. FEMA guidelines provide Indian companies to access funds from abroad by following methods:-

EXTERNAL COMMERCIAL BORROWINGS & TRADE CREDITS. FEMA guidelines provide Indian companies to access funds from abroad by following methods:- EXTERNAL COMMERCIAL BORROWINGS & TRADE CREDITS FEMA guidelines provide Indian companies to access funds from abroad by following methods:- a) External Commercial Borrowings (ECB):- It refers to commercial

More information

To enable highly rated corporate borrowers to diversify their sources of short term borrowings.

To enable highly rated corporate borrowers to diversify their sources of short term borrowings. COMMERCIAL PAPER (CP) CP is an unsecured money market instrument issued in the form of a Promissory Note and was introduced in 1990. Can now be issued in Dematerialised form. To enable highly rated corporate

More information

MANAGING CREDIT RISK IN A VOLATILE MARKETPLACE

MANAGING CREDIT RISK IN A VOLATILE MARKETPLACE Export Forum 2015 October 14, 2015 MANAGING CREDIT RISK IN A VOLATILE MARKETPLACE Presented by: George Babeu, President One Source Risk Management and Funding, Inc. WHAT WE WILL DISCUSS Today s volatile

More information

Cost of Credit. How much is customer credit REALLY costing your business? Tips & advice for effective credit management

Cost of Credit. How much is customer credit REALLY costing your business? Tips & advice for effective credit management Cost of Credit How much is customer credit REALLY costing your business? Tips & advice for effective credit management Group UK The best advice any business can follow to ensure they do not experience

More information

C&I LOAN EVALUATION UNDERWRITING GUIDELINES. A Whitepaper

C&I LOAN EVALUATION UNDERWRITING GUIDELINES. A Whitepaper C&I LOAN EVALUATION & UNDERWRITING A Whitepaper C&I Lending Commercial and Industrial, or C&I Lending, has long been a cornerstone product for many successful banking institutions. Also known as working

More information

Factoring, reverse factoring and other tools for access to finance. Ivor Istuk. Friday, 22 November 2013

Factoring, reverse factoring and other tools for access to finance. Ivor Istuk. Friday, 22 November 2013 Factoring, reverse factoring and other tools for access to finance Ivor Istuk Friday, 22 November 2013 OUTLINE Outline of presentation 1. Problem of late payments 2. Factoring good mitigation tool Defining

More information

QUARTERLY REPORT For the six months ended September 30, 2012 010_0774017502412.indd 2 2012/12/21 11:54:11

QUARTERLY REPORT For the six months ended September 30, 2012 010_0774017502412.indd 2 2012/12/21 11:54:11 QUARTERLY REPORT For the six months ended September 30, 2012 QUALITATIVE INFORMATION (1) Qualitative Information Relating to Consolidated Quarterly Operating Results During the first half of the fiscal

More information

Insurance market outlook

Insurance market outlook Munich Re Economic Research 2 May 2013 Global economic recovery provides stimulus to the insurance industry long-term perspective positive as well Once a year, MR Economic Research produces long-term forecasts

More information

U.S. Taxation of Foreign Investors

U.S. Taxation of Foreign Investors PART OF THE LEHMAN TAX LAW KNOWLEDGE BASE SERIES United States Taxation Of Investors U.S. Taxation of Foreign Investors Non Resident Alien Individuals & Foreign Corporations By Richard S. Lehman Esq. TAX

More information

Medium-term Business Plan

Medium-term Business Plan Mitsubishi UFJ Financial Group, Inc. Medium-term Business Plan Tokyo, May 15, 2015 --- Mitsubishi UFJ Financial Group, Inc. (MUFG) announced today that it has formulated its medium-term business plan for

More information

Lecture 4: The Aftermath of the Crisis

Lecture 4: The Aftermath of the Crisis Lecture 4: The Aftermath of the Crisis 2 The Fed s Efforts to Restore Financial Stability A financial panic in fall 2008 threatened the stability of the global financial system. In its lender-of-last-resort

More information

Incisive Business Guide to Factoring

Incisive Business Guide to Factoring Incisive Guide to Factoring Factoring Guide Summary This guide from Incisive outlines the features and benefits for your business from using factoring and invoice discounting services. Factoring is commonly

More information

20 April 2006. To Manager All Commercial Banks*

20 April 2006. To Manager All Commercial Banks* Unofficial Translation by the courtesy of The Foreign Banks' Association This translation is for the convenience of those unfamiliar with the Thai language. Please refer to the Thai text for the official

More information

2.5 Monetary policy: Interest rates

2.5 Monetary policy: Interest rates 2.5 Monetary policy: Interest rates Learning Outcomes Describe the role of central banks as regulators of commercial banks and bankers to governments. Explain that central banks are usually made responsible

More information

A STUDY ON THE PERFORMANCE ANALYSIS OF FACTORING SERVICES IN INDIA

A STUDY ON THE PERFORMANCE ANALYSIS OF FACTORING SERVICES IN INDIA A STUDY ON THE PERFORMANCE ANALYSIS OF FACTORING SERVICES IN INDIA Dr. K. N. KALAIVANI Dr. S. Gopalraju Government First Grade College, Anekal, Bangalore 562 106 E-Mail: drkalaivanikn9570@gmail.com ABSTRACT

More information

Commonwealth Caribbean Regional Conference. Investing in Youth Exploring Strategies for Sustainable Employment. Financing and Financial Mechanisms

Commonwealth Caribbean Regional Conference. Investing in Youth Exploring Strategies for Sustainable Employment. Financing and Financial Mechanisms Commonwealth Caribbean Regional Conference Investing in Youth Exploring Strategies for Sustainable Employment Financing and Financial Mechanisms Presented by Ian Chinapoo May 25 th, 2011 Outline: Background

More information

Understanding Invoice Finance

Understanding Invoice Finance Understanding Invoice Finance Introduction John Mackey Senior Business Development Manager Ronan Horgan Managing Director Content What is Invoice Finance? Industry Background Who can avail of Invoice Finance?

More information

Help to make the most of your savings with an Offset Mortgage

Help to make the most of your savings with an Offset Mortgage Help to make the most of your savings with an Offset Mortgage C M Y K PMS??? PMS??? PMS??? PMS??? Non-printing Colours Laser Non-print 2 JOB LOCATION: Your savings could help you reduce your monthly mortgage

More information

TELECOM ITALIA LAUNCHES THE ITALIAN CLOUD WITH A FOCUS ON THE IT MARKET. Milan, Teatro Puccini Monday, 20 September 2010. Dr.

TELECOM ITALIA LAUNCHES THE ITALIAN CLOUD WITH A FOCUS ON THE IT MARKET. Milan, Teatro Puccini Monday, 20 September 2010. Dr. TELECOM ITALIA LAUNCHES THE ITALIAN CLOUD WITH A FOCUS ON THE IT MARKET Milan, Teatro Puccini Monday, 20 September 2010 The general outlook Good morning everyone, thank you for taking part in our press

More information

China Distance Education Holdings Limited Reports Financial Results for the First Quarter of Fiscal 2014

China Distance Education Holdings Limited Reports Financial Results for the First Quarter of Fiscal 2014 China Distance Education Holdings Limited Reports Financial Results for the First Quarter of Fiscal 2014 Revenue Up 43.7% Year-over-year to $18.7 Million Net Income Up 131.9% Year-over-year to $3.4 Million

More information

THE EVOLVING FACE OF FACTORING. By Harvey S. Gross

THE EVOLVING FACE OF FACTORING. By Harvey S. Gross THE EVOLVING FACE OF FACTORING By Harvey S. Gross There is a common belief that companies factoring their receivables do so only when they are in trouble. Nothing could be further from the truth. Since

More information

PRESS RELEASE. Board of Directors approves results as of December 31 2014

PRESS RELEASE. Board of Directors approves results as of December 31 2014 PRESS RELEASE Board of Directors approves results as of December 31 2014 SOGEFI (CIR GROUP): REVENUES AT OVER 1.3 BLN (+1.1%; +4.7% AT SAME EXCHANGE RATES), NET INCOME AT 3.6 MLN MARGINS LOWER BECAUSE

More information

Adjusting to a Changing Economic World. Good afternoon, ladies and gentlemen. It s a pleasure to be with you here in Montréal today.

Adjusting to a Changing Economic World. Good afternoon, ladies and gentlemen. It s a pleasure to be with you here in Montréal today. Remarks by David Dodge Governor of the Bank of Canada to the Board of Trade of Metropolitan Montreal Montréal, Quebec 11 February 2004 Adjusting to a Changing Economic World Good afternoon, ladies and

More information

½ a mark for rounding up (6 marks) (b) There are a number of costs to the business associated with holding inventory:

½ a mark for rounding up (6 marks) (b) There are a number of costs to the business associated with holding inventory: EDI LCCI IQ ON DEMAND AWARD IN BUSINESS FINANCE AND BANKING OPERATIONS SAMPLE LEVEL 4 MARKING SCHEME DISTINCTION MARK 75% CREDIT MARK 60% PASS MARK 50% TOTAL 100 MARKS QUESTION 1 (a) Inventory days Receivable

More information

Contemporary Logistics. Two-factor Export Factoring: Optimal Option for Export-oriented SMEs Financing

Contemporary Logistics. Two-factor Export Factoring: Optimal Option for Export-oriented SMEs Financing Contemporary Logistics 06 (2012) 1838-739X Contents lists available at SEI Contemporary Logistics Journal homepage: www.seiofbluemountain.com Two-factor Export Factoring: Optimal Option for Export-oriented

More information

Small Business Lending *

Small Business Lending * Reserve Small Business Bank of Lending Australia Bulletin Small Business Lending * These notes were prepared in response to a request from the House of Representatives Standing Committee on Financial Institutions

More information

8 Financial Services in India

8 Financial Services in India 8 Financial Services in India BASIC CONCEPTS 1. Introduction Financial Services has a broad definition and it can be defined as the products and services offered by institutions like banks of various kinds

More information

Company Overview. Financial Performance

Company Overview. Financial Performance Jan/15 Feb/15 Mar/15 Apr/15 May/15 Jun/15 Jul/15 Aug/15 Sep/15 Oct/15 Nov/15 Dec/15 SPS Finquest Ltd CMP: 84.60 January 13, 2015 Stock Details BSE code 538402 BSE ID SPS Face value ( ) 10 No of shares

More information

Financial Information

Financial Information Financial Information Solid results with in all key financial metrics of 23.6 bn, up 0.4% like-for like Adjusted EBITA margin up 0.3 pt on organic basis Net profit up +4% to 1.9 bn Record Free Cash Flow

More information

Bill Discounting. Exporter. Importer BANKING AND TRADE FINANCE TUTORIAL. Importer s Bank. Exporters Bank INDIA FOREX ADVISORS.

Bill Discounting. Exporter. Importer BANKING AND TRADE FINANCE TUTORIAL. Importer s Bank. Exporters Bank INDIA FOREX ADVISORS. Bill Discounting While discounting a bill, the Bank purchases the bill receivable to the Exporter (i.e. Bill of Exchange or Promissory Note) before its due date and credits the value of the bill to the

More information

BANKING QUESTION AND ANSWERS- PART-1

BANKING QUESTION AND ANSWERS- PART-1 BANKING QUESTION AND ANSWERS- PART-1 1. Which of the following statements is true? (1) Banks cannot accept demand and time deposits from public (2) Banks can accept only demand deposits from public (3)

More information

The Mexican Economy: Facts and Opportunities

The Mexican Economy: Facts and Opportunities Manuel Sánchez Santander Global Fixed Income Summit London, England, September 20, 2012 Contents 1 Structural features 2 Recent developments and outlook 3 Inflation and monetary policy 4 Economic challenges

More information

Factoring in the 21st Century

Factoring in the 21st Century Factoring in the 21st Century The economic relevance of factoring and trade finance in Europe May 2013 1. What is factoring? 2. Who are factoring clients? 3. European factoring market and future trends

More information

FOR IMMEDIATE RELEASE 28 September 2015 BOND INTERNATIONAL SOFTWARE PLC UNAUDITED INTERIM RESULTS

FOR IMMEDIATE RELEASE 28 September 2015 BOND INTERNATIONAL SOFTWARE PLC UNAUDITED INTERIM RESULTS FOR IMMEDIATE RELEASE 28 September 2015 BOND INTERNATIONAL SOFTWARE PLC UNAUDITED INTERIM RESULTS Bond International Software Plc ( the Group ), the specialist provider of software for the international

More information

Quarterly Report. For the Quarter ended December 2014

Quarterly Report. For the Quarter ended December 2014 Quarterly Report For the Quarter ended December 2014 As on 31 December, 2014 Section I Economic & Real Estate Current Status A key development during the last few months has been the ~55% decline in international

More information

Bond Fund Investing in a Rising Rate Environment

Bond Fund Investing in a Rising Rate Environment MUTUAL FUND RESEARCH Danette Szakaly Ext. 71937 Date Issued: 1/14/11 Fund Investing in a Rising Rate Environment The recent rise in U.S. Treasury bond yields has some investors wondering how to manage

More information

On offshore outsourcing IT and why India is the best bet. 3. The advantages of offshore outsourcing IT

On offshore outsourcing IT and why India is the best bet. 3. The advantages of offshore outsourcing IT On offshore outsourcing IT and why India is the best bet Contents 1. Introduction 2. Offshore Outsourcing IT 3. The advantages of offshore outsourcing IT 4. IT functions ideal for mid size companies to

More information

Working capital: Keep the ball rolling

Working capital: Keep the ball rolling Working capital: Keep the ball rolling Author : Michael Byrne Date : March 9, 2011 Working capital is considered the life line of any company, allowing the company to grow, expand operations, and weather

More information

Current Status of the Economy, Challenges and Opportunities for Regional Business: Tea Industry

Current Status of the Economy, Challenges and Opportunities for Regional Business: Tea Industry Current Status of the Economy, Challenges and Opportunities for Regional Business: Tea Industry Chatura Rodrigo Research Economist Institute of Policy Studies of Sri Lanka Presentation flow Current Status

More information

DEBTOR FINANCE: So you are interested in Debtor Finance but you re not exactly sure what it is or how it works.

DEBTOR FINANCE: So you are interested in Debtor Finance but you re not exactly sure what it is or how it works. DEBTOR FINANCE: So you are interested in Debtor Finance but you re not exactly sure what it is or how it works. You need Debtor finance so that you can receive cash straight away to fuel your business

More information

FundingEdge / Power2Fund

FundingEdge / Power2Fund Factoring Defined In the world of finance, factoring is a transaction in which a business sells its account receivables to a third party--called a "factor"--in return for immediate cash, generally working

More information

External Commercial Borrowings

External Commercial Borrowings External Commercial Borrowings Neha Gupta Vinod Kothari & Company 1012 Krishna, 224 AJC Bose Road Kolkata- 7000017 Ph: 91-33-22817715/ 22811276 Email: neha@vinodkothari.com What is ECB? Source of funds

More information

BUILDING FACTORING BUSINESS PLATFORM PRESENTED BY

BUILDING FACTORING BUSINESS PLATFORM PRESENTED BY BUILDING FACTORING BUSINESS PLATFORM PRESENTED BY BLEND FINANCIAL SERVICES LIMITED AT WORKSHOP ON ACHIEVING SUCCESS THROUGH FACTORING ORGANIZED BY AFRICAN EXPORT IMPORT BANK (AFREXIMBANK) ON 2 ND, DECEMBER,

More information

Factoring: An Alternate Payment Method in International Trade

Factoring: An Alternate Payment Method in International Trade Factoring: An Alternate Payment Method in International Trade Surendar Vaddepalli Research Scholar, Dept. of Business Management, Osmania University, Hyderabad, vaddepalli.surendar@gmail.com Abstract Factoring

More information

China Distance Education Holdings Limited Reports First Quarter Fiscal Year 2016 Financial Results

China Distance Education Holdings Limited Reports First Quarter Fiscal Year 2016 Financial Results China Distance Education Holdings Limited Reports First Quarter Fiscal Year 2016 Financial Results - Revenue Up 13.5% Year-Over-Year to $24.4 Million, Exceeding Guidance - Cash Receipts From Online Course

More information

2012: Deeper into crisis or the long road to recovery?

2012: Deeper into crisis or the long road to recovery? 2012: Deeper into crisis or the long road to recovery? Bart Van Craeynest Hoofdeconoom Petercam Bart.vancraeynest@petercam.be 1 2012: crises looking for answers Global slowdown No 2008-0909 rerun Crises

More information

Net sales Operating income Ordinary income Net income

Net sales Operating income Ordinary income Net income MORITO CO., LTD. Financial Statement (Unaudited) For the Third Quarters of the Fiscal Year ended November 30, 2015 (Translated from the Japanese original) October 9, 2015 Corporate Information Code: 9837

More information

CASH FLOW BASED LENDING FOR SMEs

CASH FLOW BASED LENDING FOR SMEs JULY 2015 PROJECT TECHNICAL NOTE CASH FLOW BASED LENDING FOR SMEs By Ulla Balle INTRODUCTION One great opportunity in SME financing is shifting the mindset of financial institutions (FIs) from their current

More information

Muthoot finance ltd. (mfl) IPO note

Muthoot finance ltd. (mfl) IPO note Muthoot finance ltd. (mfl) IPO note Issue Details Issue Date April 18, 2011 April 21, 2011 Issue Size Rs. 8.24-9.01bn Price Band Rs. 160-175 FV Rs.10 Fresh issue 51.5 mn equity shares QIB 50% Non Institutional/HNIs

More information

Zebra Technologies Announces Record Sales for Second Quarter of 2006

Zebra Technologies Announces Record Sales for Second Quarter of 2006 FOR IMMEDIATE RELEASE Zebra Technologies Announces Record Sales for Second Quarter of 2006 Vernon Hills, IL, July 26, 2006 Zebra Technologies Corporation (NASDAQ: ZBRA) today announced that net income

More information

news CTS CORPORATION Elkhart, Indiana 46514 574-523-3800

news CTS CORPORATION Elkhart, Indiana 46514 574-523-3800 - news CTS CORPORATION Elkhart, Indiana 46514 574-523-3800 FOR RELEASE: Immediately October 26, 2015 CTS ANNOUNCES THIRD QUARTER 2015 RESULTS Delivers solid operating results despite soft sales Addressing

More information

Explaining Russia s New Normal

Explaining Russia s New Normal Explaining Russia s New Normal Chris Weafer of Macro-Advisory This Op- Ed appeared on BNE.eu on September 11 2015 One of the slogans now regularly deployed to describe Russia s current economic condition

More information