Factoring Sector Overview

2000’li yılların ikinci yarısından itibaren faktoring, ülkemizde hızlı bir gelişme göstermiştir.
Factoring Sector Overview

Factoring in Turkey

Factoring transactions in Turkey began in the 1980s and were initially conducted by banks. Today, factoring companies are regulated by the “Financial Leasing, Factoring and Financing Companies Law No. 6361” published in Official Gazette No: 28496 on December 13, 2012, and the “Regulation on the Establishment and Operating Principles of Financial Leasing, Factoring and Financing Companies No: 28627” issued by the Banking Regulation and Supervision Agency (“BRSA”) on April 24, 2013. As of the end of the year, there are 54 factoring companies affiliated with the Association of Financial Institutions in Turkey.

Factoring is a financial transaction in which companies that sell products and services through forward contracts transfer their accounts receivable to a third party financial company to ensure cash flow and secure their receivables. Factoring is basically defined as financing, guarantee and collection services.

In Turkey, a significant portion of domestic trade is forward transactions, while the cash against goods (open account transaction) payment method is widely used for export sales. Due to payment habits and methods in the Turkish market, trading companies rely on factoring to meet their need for cash and payment guarantee.

The factoring sector developed quickly in the country, especially during the second half of the 2000s in terms of transaction volume and customer numbers. After the Banking Regulation and Supervision Agency (“BRSA”) began overseeing factoring companies in 2006, the industry became more institutionalized and transparent. In recent years, factoring has become an essential instrument in financial markets due to the increased popularity of factoring products as well as more access channels to customers.

In 2016, the factoring industry strengthened its collaboration with Türk Eximbank. After obtaining access to Eximbank’s export rediscount credits, which are extended to exporters, the factoring industry executed an agreement with Eximbank in 2016 to use insured receivables as additional collateral. Subsequently, factoring companies began to provide financing to exporters for their export receivables, which are secured under Eximbank’s insurance policies.

Factoring Worldwide

Since the 1950s, several factoring companies providing advanced services have been established in many countries. Unable to develop more fully until the 1970s, factoring became a reliable financing method after the 1973 oil crisis for many enterprises seeking to expand their operations internationally under more challenging global trade conditions.

In line with widespread economic growth, a rebound in trade, better risk analysis, and more aware customers, factoring has become a modern financing method for companies around the world. In parallel with the expansion of factoring into new industries and regions, the rapid rise in computer usage and technology advancements, the merger of independent organizations with large commercial banks, and the increased competition within the sector, the global factoring volume is increasing rapidly.

Today, we have a well-established factoring industry in more than 50 countries, particularly in Europe and the USA. Europe has a big weight in factoring transactions with a ratio of 68%. Europe is followed by Asia with 25% and continental America with 6%.

The global factoring industry has expanded at an average annual rate of 8% over the last 15 years.