Q1 in factoring in Poland shows that the industry is starting to show again the form that has been impressing factoring market observers for the last few years. The return to double-digit growth certainly pleases not only factoring companies, but also customers who can more easily get a factoring limit. Almost 12% turnover growth in Q1 2021 vs. Q1 2020 allows to slowly believe in the return to "normality."
Factors affiliated with the Polish Factors Association financed almost PLN 80 billion. This may be due to the awareness of customers who, fearing further restrictions, have financed more invoices in order to secure liquidity and avoid payment bottlenecks. On the other hand, companies which have already been through another wave of pandemics and another lockdown have simply learned to live with them.
It is encouraging to see that non-recourse factoring is back on track. Businesses were more likely to use factoring with the assumption of the risk of their counterparties' insolvency. The ratio of 54% for non-recourse factoring vs. 46% for recourse factoring seems to be further evidence of a return to pre-pandemic times, and the transfer of the risk of insolvency to the insurer allows many companies to start operating in markets they had not previously considered.
When it comes to the turnover structure by sector, manufacturing companies are invariably in the lead, accounting for almost half of all companies using factoring. The second place belongs to distribution companies. It is worth mentioning transport companies, which in a pandemic have proved to be among the most busy and needed. However, the high competition in the "transport" market and the price race did not help, but rather got in the way.
The following quarters, which last year were most exposed to another lockdown, and restrictions that not only hampered business activities but also introduced uncertainty in all markets, will certainly be interesting. After that, we will find out if the vaccine has actually taken effect.
Source: Polish Factors Association
Factoring Product Manager at Comarch