NEW
YORK, May 13, 2024 /PRNewswire/ -- The
global factoring market size is estimated to
grow by USD 1720.41 bn from
2023-2027, according to Technavio. The market is estimated to grow
at a CAGR of 7.54% during the forecast
period.
For more insights on the forecast market size and
historic data (2017 - 2021) - Download
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Forecast
period
|
2023-2027
|
Base Year
|
2022
|
Historic
Data
|
2017 - 2021
|
Segment
Covered
|
Type (Domestic and
International), Application (SMEs and Large enterprise)
|
Region
Covered
|
Europe, APAC, South
America, North America, and Middle East and Africa
|
Key companies
profiled
|
ABS Global Factoring
AG, American Receivable, Bluevine Inc., CapitalPlus Construction
Services, CG24 Group AG, Charter Capital Holdings LP, Deutsche
Leasing AG, eCapital Corp., Eurobank Ergasias SA, Factor Funding
Co., FirstRand Ltd, HSBC Holdings Plc, Mizuho Financial Group Inc.,
New Century Financial Inc., PMFBancorp, Riviera Finance of Texas
Inc., Societe Generale SA, The Southern Banc Co. Inc., Triumph
Business Capital, and Universal Funding Corp.
|
Key Market Trends Fueling Growth
- Bitcoin, as the most modern
cryptocurrency and financial technology, is
revolutionizing the financial sector through its underlying
technology, blockchain.
- Blockchain's potential to transform industries, including
factoring, is evident with NASDAQ's adoption for its private
share-trading market. International players in the Fintech
industry, such as Payment service providers, FundBox, and
Accounting software, are investing heavily in blockchain
technology.
- Market expansion is fueled by the adoption and evolution of
blockchain technology, heralding a new era of innovation.
- Blockchain, the foundational technology behind
cryptocurrencies like Bitcoin, is
increasingly recognized as a mainstream payment solution,
catalyzing value appreciation.
- The transformative potential of blockchain extends across
diverse sectors, with notable applications observed in industries
such as factoring and stock markets.
- Illustrating this potential is the integration of blockchain by
the National Association of Securities Dealers Automated Quotations
(NASDAQ) within its private share-trading market, underscoring
blockchain's efficacy in driving industry evolution.
Market Challenges
- The factoring market encounters challenges due to weak tax,
legal, and regulatory frameworks, particularly in developing
countries with inadequate infrastructure.
- Collecting receivables from government-owned firms and managing
current portion of long-term debt (CPLTD) can strain working
capital for corporates.
- A significant hurdle to market expansion in developing nations
is the absence of robust regulatory frameworks governing debt
recovery mechanisms.
- Challenges within the factoring services market stem from
deficiencies in tax, legal, and regulatory structures, impeding
smooth operations.
- Inadequate infrastructure exacerbates receivables collection
bottlenecks, particularly pronounced in developing economies.
- Factors encounter obstacles when collecting payments from
government-owned entities, complicating debt recovery
processes.
- Traditional accounting practices classify the current portion
of long-term debt (CPLTD) as a liability, representing funds due
within the current period, reliant on converting current assets
into cash.
- Consequently, enterprises with substantial fixed assets and
CPLTD face tighter working capital constraints, resulting in
negative working capital scenarios.
Research report provides comprehensive data on
impact of trend, driver and challenges - Buy
Report
Segment Overview
This factoring market report extensively covers market
segmentation by
- Type
- 1.1 Domestic
- 1.2 International
- Application
- 2.1 SMEs
- 2.2 Large enterprise
- Geography
- 3.1 Europe
- 3.2 APAC
- 3.3 South America
- 3.4 North America
- 3.5 Middle East and
Africa
1.1 Domestic- In the burgeoning factoring market,
emerging economies play a pivotal role, particularly in the realm
of trade finance. Value chains are optimized through innovative
solutions like supply chain finance, which bridges the gap between
traditional bank lending and asset-based lending. Debt capital is a
crucial component, attracting potential investors seeking lucrative
returns. Factoring, an essential form of asset-based lending,
facilitates the conversion of accounts receivable into immediate
funds. This financial service is not limited to industries but
extends to various sectors, including medical insurance claims,
laboratory services, ambulatory services, health centers &
hospitals, home health agencies, and rehabilitation centers. The
factor, acting as a financial intermediary, purchases the seller's
accounts receivable at a discount rate, providing the seller with
much-needed funds against invoices. Buyers, in turn, benefit from
extended payment terms, enhancing their cash flow management.
Advancements in technology, such as machine learning (ML) and
artificial intelligence (AI), are revolutionizing factoring
processes. Cheques are increasingly being replaced by electronic
alternatives, and automation is streamlining on-premise deployment
and digital documentation. Cloud-based models and AI-based models
are gaining popularity, offering greater efficiency and
flexibility. Cryptocurrency is another disruptive
technology, potentially transforming international trade by
enabling seamless cross-border transactions. The bank segment
continues to dominate the factoring market, but non-bank financial
institutions are making significant strides, offering competitive
pricing and innovative solutions.
For more information on market segmentation with
geographical analysis including forecast (2023-2027) and historic
data (2017 - 2021) - Download a Sample Report
Research Analysis
The Factoring Market is a significant segment in the financial
services industry, leveraging advanced technologies such as Machine
Learning (ML) and Artificial Intelligence (AI) to streamline
processes for financial institutions. ML and AI are particularly
useful in automating accounts receivable processes, enabling the
swift processing of cheques and electronic alternatives. On-premise
deployment and cloud-based models are used interchangeably,
depending on the specific requirements of factoring companies.
AI-based models are increasingly being adopted for tasks like
credit risk assessment, debt collection, and capital management.
Potential investors, including those in the trade finance and
supply chain finance sectors, are keen on the potential returns
offered by factoring. The factoring market also extends to various
industries like international trade, medical insurance claims,
laboratory services, ambulatory services, home health agencies,
nurse staffing agencies, rehabilitation centers, and more.
Cryptocurrency is an emerging trend in factoring,
offering new opportunities for innovation and growth.
Market Research Overview
The Factoring Market, represented by MAChinLeArning (ML) and
Artificial Intelligence (AI), plays a crucial role in the financial
industry. Financial institutions (FI) and alternative lenders (AI)
utilize factoring to provide businesses with immediate cash flow
solutions. Factoring involves the purchase of accounts receivable
(AR) at a discount, providing businesses with cash for their
outstanding invoices. This process is essential for businesses,
particularly those with slow payment cycles or cash flow issues.
The CrypTOcurrency market also influences factoring, with the
integration of blockchain technology enabling secure and efficient
transactions. Additionally, the increasing use of machine learning
and AI in credit assessment and risk management enhances the
efficiency and accuracy of factoring services. Overall, the
factoring market is a dynamic and evolving sector that continues to
adapt to the changing needs of businesses and the financial
industry.
Table of Contents:
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation
- Type
-
- Application
-
- Geography
-
- Europe
- APAC
- South America
- North America
- Middle East And Africa
7 Customer Landscape
8 Geographic Landscape
9 Drivers, Challenges, and Trends
10 Company Landscape
11 Company Analysis
12 Appendix
About Technavio
Technavio is a leading global technology research and advisory
company. Their research and analysis focuses on emerging market
trends and provides actionable insights to help businesses identify
market opportunities and develop effective strategies to optimize
their market positions.
With over 500 specialized analysts, Technavio's report library
consists of more than 17,000 reports and counting, covering 800
technologies, spanning across 50 countries. Their client base
consists of enterprises of all sizes, including more than 100
Fortune 500 companies. This growing client base relies on
Technavio's comprehensive coverage, extensive research, and
actionable market insights to identify opportunities in existing
and potential markets and assess their competitive positions within
changing market scenarios.
Contacts
Technavio Research
Jesse Maida
Media & Marketing Executive
US: +1 844 364 1100
UK: +44 203 893 3200
Email: media@technavio.com
Website: www.technavio.com/
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SOURCE Technavio