Opportunities and Challenges for Factoring in Emerging Markets Jeroen Kohnstamm

167 MEMBERS 54 COUNTRIES EUR 338 BILLION  A/C: 13 members – 7 countries

ExporterImporter Export Factor Import Factor Credit risk protection 2 Financing 3 Ledger administration 4 Collection service 1

Network Extension

MOST SUCCESSFUL “DEVELOPING” MARKETS TaiwanEUR 8.6billion MexicoEUR 6.3billion ChileEUR 3.2billion Hong KongEUR 3.1billion ChinaEUR 2.3billion TurkeyEUR 4.5billion

MOST SUCCESSFUL EU ACCESSION COUNTRIES PolandEUR 2.5billion Czech Rep.EUR 1.7billion EstoniaEUR 1.5billion HungaryEUR.6billion LithuaniaEUR.5billion

DOMESTIC VERSUS INTERNATIONAL FACTORING  Domestic has older history  International requires global solutions  Nature of a market

Exporter Export Factor USA Import Factor FRANCE Import Factor JAPAN Import Factor

BUILDING FACTORING MARKETS – IDENTIFYING THE ELEMENTS FOR FAILURE OR SUCCESS  Banks versus Factors  Legal Framework  Industrial climate (domestic vs international)  F/X Regulations

RECOMMENDATIONS  SME’s are target clients  Start with domestic recourse and export non-recourse factoring  Learn from correspondent factors abroad  Establish national factoring association

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