State of the Factoring Industry after the turmoils of H1 2022

Lately published data by FCI just about confirm the claim that factoring is resilient to downturns. 2021 showed that the industry is not only able to go unscathed from the crisis, but to also take a good lesson from it all. A quick glance at numbers reveals the strong features of factoring in a difficult time. But it’s not the only crisis we’re about to face in the near future.

2021 results confirm the stable Factoring condition among banking products

Record turnovers of nearly €3.07 trillion determine growth rate of 12.6%, compared to a 6.5% industry drop and a volume over €2.72 trillion in 2020. It was of course due to the pandemic and restrictions of that time, that we all had to face.

Looking at various world regions, Europe remains as the leader in the Factoring Industry, with 69% of the world’s volume. Most of the top countries’ growth reached double digits: e.g. Poland (+25.6%), the UK (+20.4%), or France (+12.8%). Some revealed their true factoring potential, such as Bulgaria (+54.5%) and Czechia (+32%).

APAC region remains stable as a runner-up with 24% of the volume, or €726 billion. Here, the top players also achieved much growth, just to mention Japan (+14.5%) and India, with an astonishing result of +141%.

The Americas were able to ascend as well. After the heavy fall of -30% in 2020, the 2021 brought growth of +22%, and reached €183 billion.

A change in perspective — Russian aggression against Ukraine

What will be the numbers after the first half of 2022? While waiting for the figures, we must not forget the situation east of the Polish border. The ongoing war in Ukraine has already impacted the world economy.

Disrupted supply chains are a critical aspect affecting the economic environment. Sanctions against the aggressors have resulted in increased cost of the transport of many goods, which is confirmed by the constantly rising prices. Fuel cost increase is a significant factor. According to the EBRD report, Russia is the main supplier of natural gas in many countries in the CEE/SEE region. For some, such as Serbia and Slovakia, the share of Russian gas is as high as 90%. Supply chain of food is in a similar situation — the sanctions imposed on Russian banks will also disrupt trade flows between European countries.

2022 is expected to present the Factoring Industry’s resilience to further crises, including those that are still ahead, but the impact of which is already noticeable. Let’s await the results for the first half of the year, but be aware of the numbers for Q3 and Q4, which is then that the sanctions imposed and the rise in inflation will be the most impactful, also in factoring.