FCI, the global representative body for factoring and financing of open account domestic and international trade receivables, has released their latest world factoring statistics. 

This 2021 report indicates that the factoring and receivables finance industry volume witnessed a significant growth of +12.6% in 2021.

This increase comes after the devastating impact of COVID-19 in 2020, which caused a staggering decline of -6.5% in volume, the single worst year reported by FCI since it began reporting the global statistics in the late 1970s.  

Compared with the previous year’s €2,724 billion, the 2021 estimated volume of €3,069 billion represents the first double-digit increase reported in over two decades. 

Each region was affected slightly differently and the gradual ‘return to normal’ has been different, with some showing more progress than others.

Europe

Europe, the largest contributor to the industry representing around 69% of global volume with €2,118 billion, has shown an overall increase of close to 14.8%. 

From a factoring volume perspective, the top five players include France (+12.8%), the United Kingdom (+20.4%), Germany (+12.5%), Italy (+10.0%), and Spain (+9.4%). 

Some markets exceeded expectations, resulting in astounding growth rates like Poland (+25.6%), Romania (+19.3%), Russia (+62.4%), Bulgaria (+54.5%), and Czech Republic (+32.0%). 

Turkey, another significant player in Europe showed in 2021, for the second consecutive year, another decline – from €18.9 billion in 2020 to €15.9 billion in 2021, representing a drop of -15.9%. 

However, Turkey suffered from a significant depreciation in its currency last year, and hence the translated figures into euros certainly painted a much grimmer picture.

Asia Pacific

The Asia Pacific region represents approximately 24% of global volume with €726 billion, which experienced an increase of +4.2% over 2020. 

In 2021, the volume of €538 billion relates to the Greater China region, including Mainland China (+2.7%), Hong Kong (-3.8%), and Taiwan (+15.3%). 

Japan displayed a growth rate of +14.5% reaching €59 billion. 

India experienced the most explosive growth rate of +141% with €8.6 billion.

The Americas 

The Americas, which was the hardest-hit region globally in 2020, showed a remarkable recovery in 2021. 

The regional volume, which represents a 6% share of the total world factoring volume with an overall figure of €183 billion experienced a double-digit increase of approximately +22% after a fall in 2020 of -30%.

South and Central America, with close to a 3% share of the total world factoring volume with €86 billion, witnessed a slight increase of +3%. 

The top three players in this region are Chile (+8.9%), Brazil (+11.4%), and Mexico (+18.3%).

North America, with its 3% share of the total world factoring volume with €97 billion, displayed a marked improvement increasing +45.7% compared to 2020.  

That compares with a reduction in volume in 2020 of -23%.  

The US retail sector in 2020 was severely impacted by the pandemic with numerous bankruptcies reported that year, however, 2021 witnessed a significant turnaround in part due to the strong support by the US government stimulus programs.  

Africa

Africa represents a 1% share of the total world factoring volume. 

The total market adds up to a total of €32 billion indicating also a significant growth rate of 28% compared to 2020.  

South Africa, the largest market accounting for over 80% of the entire volume on the continent, witnessed a staggering increase of 30%, certainly an indication that the African market looks ready to return to its strong growth trajectory in the foreseeable future. 

Return to normal

Considering the continuation of a challenging global environment stemming from the pandemic, the FCI market survey results demonstrated the strength and resilience of the industry in 2021, with a 12.6% growth rate over 2020. 

This significant turnaround in global factoring volume seems to reflect a return to a state of normalcy. 

FCI has concerns about the effects on the industry of the withdrawal of state support, inflation, interest rates, and the continuing pandemic in China during the second half of 2022.

However, the factoring community normally excels during times of crisis and even though this period continues to be challenging, FCI remains bullish and expects the industry to continue its positive trajectory for the foreseeable future.

This story was first published by FCI