FCI, the global representative body for factoring and financing of open account domestic and international trade receivables, has released their annual World Factoring Statistics report.
The report highlights that the factoring and receivables finance industry once again grew at a double digit rate. 2022’s increase of 18.3% surpasses 2021’s growth of 12.3%. It is estimated that this industry grew by €3,659 billion in 2022.
The year 2022 witnessed an unprecedented growth, setting a historical precedent as the industry experienced the largest single-year increase in volume. The remarkable growth of more than €590 billion YOY solidifies its position as the biggest increase ever reported. This achievement can be attributed to the recovery from COVID-19, substantial government stimulus, a surge in pent-up consumer demand, and the subsequent increase in inflation.
Examining the past two decades, including the robust growth witnessed in 2022, the compounded annual growth rate reached an incredible 8.83%. Domestic and international factoring experienced substantial growth during this 20-year period.
Europe, which once again was the largest contributor to the industry, represented 68% of global volume. In 2022, the European region contributed €2,499 billion, which is an increase of 18% from 2021. The five largest markets included:
- Spain, with an increase of 30%,
- Germany, with an increase of 20%,
- Italy, with an increase of 14%,
- France, with an increase of 15%,
- United Kingdom, with an increase of 8%.
However, multiple markets exceeded growth expectations, including Ukraine (130%), Lithuania (67%), Serbia (57%), Turkey (51%), Cyprus (50%), Bulgaria (49%), Georgia (34%), Greece (33%), and Romania (31%).
The Asia Pacific region represents approximately 24% of global volume with €881 billion, which experienced an increase of 17% over 2021.
Within the region, Greater China, including Mainland China (23%), Hong Kong (2%), and Taiwan (2%), accounts for a volume of €671 billion. India demonstrated explosive growth with a growth rate of +83.4%, reaching €15.7 billion, following the implementation of a robust legal and regulatory framework.
Singapore also displayed substantial growth of 52%, reaching €44 billion. On the other hand, Japan witnessed a decrease of 2%, amounting to €57 billion.
The Americas region continued its upward trajectory from 2021, with a remarkable growth rate of 47%. In terms of market share, the Americas represent 6% of the total world factoring volume, with an overall figure of €228 billion.
South and Central America, comprising 3% of the total world factoring volume with €124 billion, witnessed a significant increase of 44%. The top three players in this region are:
- Mexico, with an increase of 112%
- Chile, with an increase of 41%
- Brazil, with an increase of 33%
North America, with a nearly 3% share of the total world factoring volume (€104 billion), demonstrated notable improvement, increasing by 7% compared to 2021. Canada witnessed a growth of 15%, while the USA experienced a 7% increase.
Africa and Middle East
Africa accounted for 1% of the total world factoring volume in 2022, amount to €41 billion, indicating a significant growth rate of 29% compared to 2021, which is consistent with the previous year’s increase.
South Africa, the largest market in the continent, contributes to over 80% of the entire volume and witnessed a staggering increase of 38%, solidifying its position as a market with strong growth prospects in the foreseeable future.
The Middle East, representing 0.3% of the global factoring volume, experienced a 2% increase compared to 2021. The most notable growth was observed in Israel, with a 5% increase.
Resilience of the factoring industry
Despite the continuation of a challenging global environment, the results of the FCI market survey for 2022 demonstrated the strength and resilience of the factoring and receivables finance industry. With an impressive growth rate of 18.3% over 2021, the industry has confirmed the expected return to normalcy. Concerns expressed a year ago, including the impact of increased credit risk in the second half of 2022 due to the withdrawal of state support, rising inflation and interest rates, the conflict in Eastern Europe, and the ongoing effects of the pandemic, particularly felt in Asia, have not been reflected in the industry’s statistics.
On the contrary, the significant increase in volume signifies the vital role played by the industry in supporting SMEs and corporates globally. It will undoubtedly be remembered as the most prosperous year of the century. As the global economy continues to recover and adapt to the changing landscape, factoring and receivables finance will remain a critical component of the financial ecosystem, offering valuable solutions for businesses of all sizes.
The collaboration between FCI members, strategic stakeholders, and industry participants worldwide will continue to shape the landscape of factoring and receivables finance, enabling businesses to thrive and succeed in an increasingly interconnected and dynamic global marketplace.
The original report was published by FCI.