Factoring Services Market to Reach $5,872.00 billion, Globally, by 2031 at 6.1% CAGR: Allied Market Research
The rise in open account trading opportunities and the need for alternate sources of financing for small & medium enterprises (SMEs) to meet immediate business goals are driving the global factoring service market. Moreover, increased awareness and understanding of supply chain financing benefits are boosting the factoring service market size.
Wilmington, Delaware, Sept. 20, 2024 (GLOBE NEWSWIRE) — Allied Market Research published a report, titled, ”Factoring Services Market by Provider (Banks and NBFCs), Enterprise Size (Large Enterprises and SMEs), Application (Domestic and International) and Industry Vertical (Construction, Manufacturing, Healthcare, Transportation & Logistics, Energy & Utilities, IT & Telecom, Staffing, and Others): Global Opportunity Analysis and Industry Forecast, 2022-2031“. According to the report, the “factoring services market” was valued at $3,271.45 billion in 2021, and is projected to reach $5,872.00 billion by 2031, growing at a CAGR of 6.1% from 2022 to 2031.
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The rise in open account trading opportunities and the need for alternate sources of financing for small & medium enterprises (SMEs) to meet immediate business goals are driving the global factoring service market. Moreover, increased awareness and understanding of supply chain financing benefits are boosting the factoring service market size. However, the lack of a stringent regulatory framework for debt recovery mechanisms and foreign currency restrictions, and stamp duties is hampering the factoring service market growth. On the contrary, the rise in technological advancements such as automated invoices is expected to offer remunerative opportunities for the expansion of the factoring service market during the forecast period.
The large enterprises segment held the highest market share in 2021.
By enterprise size, the large enterprises segment dominated the market in 2021, this dominance is attributed to the substantial working capital needs of large organizations and their reliance on factoring services to maintain cash flow and liquidity. Large enterprises often engage in significant trade volumes, making factoring an attractive solution to manage accounts receivable and reduce payment delays. However, the SMEs segment is expected to witness the largest CAGR of 6.2%, small and medium-sized enterprises (SMEs) are increasingly turning to factoring as a means to improve cash flow, manage working capital, and reduce the financial burden of long payment cycles from clients. With limited access to traditional financing methods, SMEs are finding factoring services to be a flexible and accessible solution for unlocking funds tied up in accounts receivable.
The domestic segment held the highest market share in 2021.
By application, the domestic segment accounted for the largest share in 2021. this dominance is driven by the significant demand for domestic factoring services within national markets, where businesses seek to optimize their cash flow and manage credit risks related to local trade transactions. However, the international segment is expected to witness the largest CAGR of 6.5%. This growth is driven by the increasing globalization of trade, with businesses expanding their operations across borders and seeking more efficient ways to manage international receivables. As companies engage in cross-border transactions, the need for factoring services to mitigate the risks associated with foreign trade, such as currency fluctuations and credit risks, has become more prominent.
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Regional Insights: The Europe region held the highest market share in 2021.
By region, the factoring services market was dominated by Europe in 2021. Europe’s dominance is largely attributed to the strong presence of well-established financial institutions and a highly developed trade finance infrastructure. Factoring is widely used by businesses across the continent, particularly in countries like the UK, Germany, France, and Italy, where the practice has become a key financial tool for managing working capital and reducing payment risks.
Key Industry Developments
- In March 2024, Cashinvoice partnered with SBI Global Factors to broad base the use of factoring solutions for MSMEs. With this collaboration, the company is targeting additional credit disbursement of $360 million across over 100 MSMEs in tier 2 and tier 3 areas in the financial year 2024-2025.
- In June 2023, The African Export-Import Bank (Afreximbank) signed the deal to provide lines of credit totaling $24.61 million to enable factoring companies to expand their factoring activities in Africa.
- In August 2023, Exim Bank launched India Exim Finserve, its subsidiary, in GIFT City, Gujarat. The company provides a range of services for Indian exporters, focusing on export factoring with a combination of receivables financing, accounts receivable servicing, and coverage of non-payment risks.
Key Benefits for Stakeholders
- This report provides a quantitative analysis of the market segments, current trends, estimations, and dynamics of the factoring services market analysis from 2021 to 2031 to identify the prevailing factoring services market opportunities.
- The market research is offered along with information related to key drivers, restraints, and opportunities.
- Porter’s five forces analysis highlights the potency of buyers and suppliers to enable stakeholders make profit-oriented business decisions and strengthen their supplier-buyer network.
- In-depth analysis of the factoring services market segmentation assists to determine the prevailing market opportunities.
- Major countries in each region are mapped according to their revenue contribution to the global factoring services market outlook.
- Market player positioning facilitates benchmarking and provides a clear understanding of the present position of the market players.
- The report includes the analysis of the regional as well as global factoring services market trends, key players, market segments, application areas, and factoring services market opportunity.
- The study provides an in-depth analysis of the global factoring services market forecast along with current & future trends to explain the imminent investment pockets.
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Factoring Services Market Report Highlights:
Aspects Details
By Industry Vertical
- Construction
- Manufacturing
- Healthcare
- Transportation & Logistics
- Energy & Utilities
- IT & Telecom
- Staffing
- Others
By Provider
- Banks
- NBFCs
By Enterprise Size
- Large Enterprises
- SMEs
By Application
- Domestic
- International
By Region
- North America (U.S., Canada)
- Europe (United Kingdom, Germany, France, Italy, Spain, Netherlands, Rest of Europe)
- Asia-Pacific (China, India, Japan, South Korea, Australia, Singapore, Rest of Asia-Pacific)
- LAMEA (Latin America, Middle East, Africa)
Key Market Players
KUKE Finance JSC, Advanon AG, BNP Paribas, China Construction Bank, HSBC group, Societe Generale, ALAMI Technologies, Deutsche Factoring Bank, The Southern Bank Company, Eurobank, Aldermore Bank, ICBC, Barclays, Mizuho Financial Group, Inc., Hitachi Capital (UK) PLC, AwanTunai, Riviera Finance of Texas, Inc.
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