This synergy largely comes from a mutual understanding that more needs to be done to help uplift smaller parties in the financial ecosystem: underrepresented groups of society, small and medium-sized enterprises (SMEs), and emerging economies. 

Baydar, a veteran of the factoring industry with 35 years of experience, currently serves as Executive Chairman of TEB Factoring, Turkey’s largest export factoring company and a subsidiary of BNP Paribas. Under his leadership, TEB has become a cornerstone of the Turkish trade finance landscape.

The magic of factoring, Baydar said, comes from its coverage of “three services under [one] umbrella”: credit protection, collection services as factors, and funding. Its multifaceted nature makes factoring a sought-after product during problematic periods.

An umbrella in a thunderstorm

Think about it this way: when a nation’s exporters send out raw materials, finished goods, or other valuable resources, they rely on their buyers, often overseas, to pay them back. But what happens if those payments don’t come through? It’s not just the exporting company that suffers a loss. That loss ripples outward, weakening the financial stability of the country itself, chipping away at its economic equity. Meanwhile, factoring ensures that businesses get paid on time. Even when buyers delay or default, factoring adds a protective layer.

That’s why, if you look at factoring volumes over the years, Baydar highlighted that the “main volume increases […] happen during crisis time.”

This can be seen particularly in the aftermath of the 2008-2009 global financial crisis. In the four years following the 2009 recession, the industry added nearly €1 trillion in factoring volume globally, driven by a systemic growth in factoring across both developed and emerging markets. In the latter, the service was hailed for providing a source of protection and liquidity for SMEs. 

International cross-border factoring grew more in this period too: factoring growth rates as of 2013 outstripped world exports by 3.5 times, credit-insured exports by 2.2 times, and trade letters of credit by 16 times. This surge was especially pronounced in specific markets, with China’s two-factor volume doubling to almost €8 billion, Turkey’s rising 20% to €3.5 billion, and Hong Kong’s increasing by 70% to more than €3 billion in 2012. On the import factoring side, the US market grew 50% to €7.5 billion, France increased 33% to €2.7 billion, and China surged 160% to €2.4 billion.

“At these turbulent times, companies prefer to cover their risk, and they come to factoring companies to protect themselves,” explained Baydar. “This is our magic, I must say.”

This observations extends to the current period. One needs to look no further than the daily news to understand that we are living through a time when a post on X can send stock markets spiralling; when centuries of insecurity between two countries are coming to a head. The International Monetary Fund’s (IMF) World Economic Outlook (WEO) for 2025, off the back of a rocky post-COVID recovery phase, was gloomy: global growth is expected to slow to 2.8% in 2025 and 3% in 2026, revised downwards from 3.3% projections in their January 2025 WEO update. For context, pre-COVID growth levels were 3.7% on average. The trade war with which we are all well acquainted is the main source of intensifying downside risks.

Amidst a year marked by elevated interest rates, stubborn inflation, conflict, and tariffs, the global factoring industry has maintained a stable performance. In 2024, the industry achieved a total turnover of €3,894 billion compared to €3,791 billion in 2023: an increase of 2.7%. 

The Middle East is the only region where factoring volumes declined (by 13.9%) from 2023, which has largely been attributed to ongoing geopolitical tensions and broader economic uncertainty in the region. Elsewhere:

• Europe maintained its dominant position in the global factoring landscape, accounting for approximately €2,600 billion or 66.7% of global turnover in 2024, with modest growth of 1.8% over the previous year. 
• Emerging European markets showed particularly robust expansion, with Moldova growing by an extraordinary 122%, North Macedonia by 63%, Georgia by 51%, Türkiye by 36%, and Latvia by 25%. 
• The Asia-Pacific region solidified its position as the second-largest market, contributing €964 billion or 24.8% of the global total, with growth of 2.4%. China continued to lead globally as an individual country, recording €679 billion in turnover, whilst other significant markets in the region included Japan, India, Singapore, and Hong Kong.
• South and Central America expanded by 5.8%, driven by growing demand in Brazil, Chile, and Mexico.
• North America rebounded impressively with a 28% increase after previous declines.

If it’s all so magical, what’s the holdup? For one, it’s a complex product requiring heavy paperwork. In the types of markets where factoring could make the most pronounced impact, financial literacy is often limited. 

But in essence, “the resources of factoring companies are limited,” said Baydar. These organisations aren’t conglomerates, so extra funding is needed to finance their clients. This funding ends up directly in the trade finance system; support from larger financial entities is essential to allow factoring product to fully aid the ecosystem.

—

It’s futile to try and manage international macroeconomic volatility. But before looking to protect against risk, the next option should be to find opportunity in the chaos: collecting rainwater in a thunderstorm. Factoring as a product allows organisations of all sizes to do just that

Bankers and financiers around the world should look at factoring’s growth story, and come to realise that it’s useful for “countries’ economies, for companies’ cash flow… it’s a healthy financial tool for everybody,” as Baydar summarised.