Factoring becoming popular
According to Gaszton Gál, general director of CIB Faktor Pénzügyi Szolgáltató Zrt, a boom occurs in factoring when conventional forms of financing show decline. – How has the factoring business coped with the recession seen in 2007? – The market produced overall growth of 7 per cent. The growth achieved by CIB Faktor was substantially higher than the average. As banks have tightened their financing policies, this gives us an advantage, because we are working with controlled risks. We are not looking at financial guarantees offered by clients. Instead, we focus on the customers of our clients. – Has the increase in demand been limited to SME-s only? – SME-s are in a special position, with the managing director often performing several functions. They are often lacking both the means and the expertise to handle outstanding debts. We can help them in such tasks. – In what way is client monitoring different when it is performed by a factoring enterprise? – We obtain information from public databases, the list of bad debtors and specialised credit reference agencies. We also negotiate in a different style, as we often represent five or six creditors. Our annual turnover is over HUF 50 billion and we are in contact with 1,000 debtors. – Payment morale deteriorated drastically last year. Is this trend continuing this year? – This is not what we see. The number of defaults in payment has not increased substantially, but their length has. The main reason for this is the stricter financing policy followed by banks. As the market share of big retail chains is growing in the FMCG sector and the role of purchasing co-operatives is also increasing, payment morale has begun to improve. – What do you expect to see in the next few months? – I think that an increasing number of clients will start looking for alternative forms of financing. I expect that we are going to play a bigger role in collecting debts and risk sharing. We are also going to enter new areas, like the financing of local governments and hospitals.
Related news
Related news
Hungary has been a member of the European Union for two decades: what does this mean for the economy?
This year Hungary joined the European Union twenty years ago.…
Read more >Inflationary pressures remain with us
Inflationary pressure still does not ease the companies. Although inflation…
Read more >Hungarian companies are optimistic about the climate goals
Domestic companies are optimistic about their climate commitments, but divisions…
Read more >