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Factoring Service Market Research Report - Segmented By Category, Type, Financial Institution, End-User, and Region - Size, Share, Trends, COVID-19 Impact and Growth Analysis Report - Industry Forecast (2022 to 2027)

Factoring Service Market Size (2022 - 2027)

The global Factoring Service market is estimated to grow from USD 3.54 billion in 2022 in reaching USD 5.43 billion in 2027. The market is predicted to register a CAGR of 8% from 2022 to 2036. 

Factoring services are likely to become an essential part of the supply chain networks due to the simplification of the services and their financial flexibility. Factoring is also known as debt factoring, asset-based lending, invoice finance is increasing popularly for businesses to increase cash flow by selling invoices o third parties at a discount. 

Factoring is termed as the process of purchasing an organization's debt or invoice at a discount to asset the buyer at checkout. Factoring services can be offered by independent financial providers or banks. Maturity factoring, appeal, non-appeal, discourse, domestic, disclosure, export advancements are some of the common forms of the factoring processes. 

Market Drivers

The quick economic growth across the advancing countries and the demand for factoring as a substitute form are increasing which in turn fosters the market growth during the timeline period. Technological improvements like the adoption of blockchain and the provision of safe and stable financing services are to fuel the market growth. 

Several companies and organizations like Factors Chain International (FCI) are creating awareness in consumers of businesses. Governments are supporting the growing adoption of the state-of-the-art receivables platform based on the new blockchain or Distributed Ledger Technology (DLT). The enterprise owners are increasing their interest to pursue new and non-conventional ways of finance for the companies. 

Market Restrains

However, a shortage of mindfulness, clumsy documentation processes hinder the factoring services market growth. Also, the conception of the high-interest rates hampers the market growth during the foreseen period. 

Segmentation Analysis

As per the research report, the global factoring services market is based on the category, type, financial institution, and end-user. 

Factoring Service Market - By Category

  • Domestic
  • International

By category, the domestic segment dominated the factoring service market. The segment accounted for nearly 70% of the market share in 2022. In China, the demand for domestic is high as the governments are efforting high to surge the private consumption propels the market growth. 

The International segment has experienced generous growth due to the increase in open account trade. The growth of the segment is accredited to an increase in the open account trade from suppliers in emerging countries. The majority of the importers across the developing countries are considering factoring services as appropriate to conventional forms of trade accentuates the services demand. The increasing number of Chinese manufacturers are transferring their production facilities to the Philippines, Vietnam, and Mexico to prevent the continuous tariff war. The above-mentioned factors help in fueling the market further. 

Factoring Service Market - By Type 

  • Recourse
  • Non-recourse

The recourse type segment led the factoring service with more than 55% of the share in 2022. The segment offers all facilities excluding debt protection. The recoursing factoring is widely used in developed countries.

Factoring Service Market - By Financial Institution

  • Banks
  • Non-Banking Financial Institutions

Based on the financial institution, the bank segment dominated the factoring service in 2022 with nearly 80% of the share. Globally, banks are the major source of financial organizations. These banks are progressively providing factoring services due to the technology adoption like distributed ledgers. 

Moreover, certain banks are advancing blockchain technology platforms in addressing the client's financial needs. 

Factoring Service Market - By End-User

  • Manufacturing
  • Transport & Logistics
  • Information Technology
  • Healthcare
  • Construction
  • Others

The manufacturing end-user constituted the largest share with more than 30% in terms of revenue. The manufacturing sector is extended across countries like India, and other South and Southeast Asian countries propel the end-user segment growth. The demand for factor financing is promised to surge.  

The other segments like healthcare, transportation, and logistics are experiencing appreciable growth over the foretold period. Medical factoring is supporting the companies to overcome the cash flow problems caused due to delayed payments. Most of the services are majorly used by healthcare providers and medical professionals. 

Regional Analysis

The European market for factoring services is said to generate around 60% of revenue share during the forecasted period. France, Italy, the UK, and Germany constitute more than two-thirds of the region's market. The growth owes to the tactical importance of receivables funded by the commercial banking sector. The existing trade within the European Economic Zone and rising trade with quicking markets in Eastern Bloc countries are accumulating the demand for factoring services in Europe. 

In North America, United States plays a vital role in the growth of the factoring services market. 

However, Asia-Pacific is expected to be the most adaptable region throughout the timeframe period. The Asian countries are appearing as major hubs for those companies concentrating on low-cost manufacturing. China and India have a larger need for factoring services in small and medium (SMEs) in the APAC. China is the main exporter of chemical materials, electronic components, and other industrial products is accumulating the factoring services market growth. 

Latin America and the Middle East and African regions are said to have notable growth in the factoring services market. 

Major vendors in the Factoring Service Market

Some of the prominent players operating in the Factoring Service market:

  1. Barclays Bank PLC
  2. BNP Paribas
  3. China Construction Bank Corporation
  4. Deutsche Factoring Bank
  5. Eurobank
  6. Hitachi Capital (UK) PLC
  7. HSBC Group
  8. ICBC China
  9. Kuke Finance
  10. Mizuho Financial Group, Inc.

COVID-19 Impact on Factoring Service Market

During the pandemic period, the demand for healthcare facilities and medical professionals is on the high rise and accentuates the growing demand for factoring services in the healthcare sector. Moreover, the sudden eruption of the COVID-19 pandemic has affected the global economy resulting in supply chain disruptions and influencing a strict financial impact on financial markets and enterprises. 

The COVID-19 lockdowns, emergency declarations in countries, travel-related bans, and panic in people have also affected certain industries. In the upcoming years, the developments are said to suppress the factoring services market growth. The quick and widespread COVID-19 pandemic relatively smashes completely economy of the financial markets and enterprises.

Factoring Service Market - Forecast (2021 - 2026)

Chapter 1. Factoring Service Market  – Scope & Methodology

1.1. Market Segmentation

1.2. Assumptions

1.3. Research Methodology

1.4. Primary Sources

1.5. Secondary Sources

Chapter 2. Factoring Service Market  – Executive Summary

2.1. Market Size & Forecast – (2021 – 2026) ($M/$Bn)

2.2. Key Trends & Insights

2.3. COVID-19 Impact Analysis

                2.3.1. Impact during 2021 - 2026

                2.3.2. Impact on Supply – Demand

                2.3.3. Impact on Production Cost

                2.3.4. Impact on Supply Chain

Chapter 3. Factoring Service Market  – Competition Scenario

3.1. Market Share Analysis

3.2. Product Benchmarking

3.3. Competitive Strategy & Development Scenario

3.4. Competitive Pricing Analysis

3.5. Supplier - Distributor Analysis

Chapter 4. Factoring Service Market  Entry Scenario

4.1. Case Studies – Start-up/Thriving Companies

4.2. Regulatory Scenario - By Region

4.3  Customer Analysis

4.4. Porters Five Force Model

                4.4.1. Bargaining Power of Suppliers

                4.4.2. Bargaining Powers of Customers

                4.4.3. Threat of New Entrants

                4.4.4. Rivalry among Existing Players

                4.4.5. Threat of Substitutes

Chapter 5. Factoring Service Market  - Landscape

5.1. Value Chain Analysis – Key Stakeholders Impact Analysis

5.2. Market Drivers

5.3. Market Restraints/Challenges

5.4. Market Opportunities

Chapter 6. Factoring Service Market – By Category

6.1. Domestic

6.2. International

Chapter 7 . Factoring Service Market  – By Type

7.1. Recourse

7.2. Non-Recourse

Chapter 8 . Factoring Service Market  – By Financial Institution

8.1. Banks

8.2. Non-Banking Financial Institutions

Chapter 9 . Factoring Service Market  – By End-User

9.1. Manufacturing

9.2. Transport & Logistics

9.3. Information Technology

9.4. Healthcare

9.5. Construction

9.6. Others

Chapter 9. Factoring Service Market , By Geography – Market Size, Forecast, Trends & Insights

9.1. North America

                9.1.1. U.S.A

                9.1.2. Canada

                9.1.3. Mexico

9.2. Europe

                9.2.1. Italy

                9.2.2. Spain

                9.2.3. Russia

                9.2.4. Germany

                9.2.5. UK

                9.2.6. France

                9.2.7. Rest of Europe

9.3. Asia Pacific

                9.3.1. Japan

                9.3.2. South Korea

                9.3.3. China

                9.3.4. India

                9.3.5. Australia & New Zealand

                9.3.6. Rest of Asia-Pacific

9.4. Rest of the World

                9.4.1. Middle East

                9.4.2. Africa

                9.4.3. South America

Chapter 10. Factoring Service Market  – Company Profiles – (Overview, Product Portfolio, Financials, Developments)

10.1. Company 1

10.2. Company 2

10.3. Company 3

10.4. Company 4

10.5. Company 5

10.6. Company 6

10.7. Company 7

10.8. Company 8

10.9. Company 9

10.10. Company 10

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