Factoring Services Market Size To Surpass USD 12.05 Bn By 2030

Published Date : 09 Nov 2022

The global factoring services market size was exhibited at USD 6.56 billion in 2022 and is projected to surpass around USD 12.05 billion by 2030, poised to grow at a CAGR of 7.8% during the forecast period 2021 to 2030.

One of the important drivers driving the growth of the factoring services market is a significant increase in the banking, financial services, and insurance (BFSI) sector. In addition, the growing demand for alternate sources of finance for micro, small, and medium companies (MSME) is propelling the growth of the market during the forecast period. Factoring enables a company to receive working capital loans while also reducing credit risks. As a result, rising knowledge of the benefits of supply chain financing, such as factoring, is also boosting market growth. Another growth factor is the use of blockchain technology and bitcoin in factoring services. The factors such as the growing use of digital platforms in trade finance and the increase in cross-border trade activities are expected to propel the factoring services market growth. 

Factoring Services Market Report Scope

Report Coverage Details
Market Size In 2022 USD 6.56 Billion
Market Size By 2030 USD 12.05 Billion
Growth Rate from 2022 to 2030

CAGR of 7.8% 

Base Year 2021
Forecast Period 2022 to 2030
Largest Market Europe
Fastest Growing Market Asia-Pacific
By Category
  • Domestic Factoring
  • International Factoring
By Type
  • Recourse Factoring
  • Non-recourse Factoring
By Application
  • Small and Medium Enterprise (SMEs)
  • Large Enterprise
Regions Covered
  • North America 
  • Europe
  • Asia-Pacific 
  • Latin America 
  • Middle East and Africa 

Report Highlights

  • Based on the category, the domestic factoring segment dominated the factoring services market in 2020. The consolidation of the domestic factoring business has been facilitated by the increasing effectiveness of electronic invoices. Furthermore, the key driver driving the segment’s growth is high domestic demand in nations such as India and China, which is a result of government initiatives and activities to encourage private consumption. 
  • Based on the type, the recourse factoring segment dominated the factoring services market in 2020. All services, except debt protection and security, are provided by recourse factoring. The client’s obligation of the factoring services to the factor does not end until the dues are paid in full. In organized markets and developed regions, recourse factoring is widely utilized.

Regional Snapshot

Europe is the largest segment of the factoring services market in terms of region. Developed economies such as the UK, Germany, France, and Italy contribute towards the growth of the factoring services market. There are several factoring agencies in Europe that provide services. The factoring agencies are Tallysticks, Marketinvoice, Advanon, Finexkap, and Debtors. 

The Asia-Pacific region is the fastest-growing region in the factoring services market. In emerging economies such as India, financial assistance has become a necessity, which can be addressed by enhancing the factoring process. The banks and technology businesses are working to develop unique solutions and lower the total cost of the process. Several fintech companies are also investing in finance models like budget and forecasting models to make factoring transparent and simple.

Market Dynamics

Drivers: Increased demand for factoring laws and regulations

Due to financial fraud, the demand for factoring rules and regulations has increased over the period of time. The government of several countries had elected governing bodies for financial services. One such is the FCI. The FCI is the global representative body for factoring services and financing of open accounts for domestic and international trade receivables. It includes a strong legal framework such as general rules for international factoring, interactor agreement, and FCI constitution. All these frameworks help factors to carry out factoring services effectively and efficiently. Thus, the increased demand for factoring laws and regulations is propelling the growth of the factoring services market. 

Restraints: Archaic regulations

The banking, financial service, and insurance (BFSI) sector have evolved over the decade. The launch of cryptocurrencies and bitcoin has transformed the finance sector to great extent. The laws and rules governing factoring services are quite old. These rules have to be changed according to the countries' rules and regulations. Due to archaic regulations, several factoring service providers are not able to grow at a constant growth rate. As a result, the archaic regulations will hinder the growth of the factoring services market during the forecast period. 

Opportunities: Rising implementation of digital platforms

Digital platforms are expected to become the preferred and dominant business model for financial institutions and banks in the future, based on current trends in the market. Consumers and small businesses can connect with financial and other service providers via an online or mobile channel as part of their day-to-day activities with the help of digital platforms. For instance, the most well-known cryptocurrency is bitcoin. Bitcoin can be traded on digital platforms easily. As a result, the rising implementation of digital platforms is creating growth opportunities for the factoring services in the market. 

Challenges: Stock market volatility 

The growth of the financial sector depends on the stock market. The volatility in the stock market is usually associated with investment risk, but it can also be leveraged to lock in higher gains. The stock market influences the development of the factoring services market to a much greater extent. The stock market decides the growth of the market. Thus, stock market volatility is a huge challenge for the growth of the factoring services market. 

Some of the Prominent Players:

  • The Southern Banc Co. Inc
  • Advanon AG
  • BNP Paribas Cardiff
  • Mizuho Financial Group Inc.
  • Deutsche Leasing AG
  • Riviera Finance of Texas Inc.
  • SocieteGenerale SA
  • Eurobank Ergasias SA
  • Hitachi Capital PLC
  • Triumph Business Capital

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