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Press Release: First decrease in factoring turnover in 11 years – 2020 EU figures

The provisional data collated by the EU Federation for the Factoring and Commercial Finance Industry (EUF) shows that in 2020 factoring and commercial finance volumes in the EU decrease of 5,4% in factoring turnover. It is the first time in 11 years. Total factoring turnover in the EU reached 1.78 trillion € comparing to 1.91 trillion € in 2019. Country members organizations indicate that the drop was mainly an effect of a lockdown. 79% of this represented domestic business and the balance international.

This year’s GDP penetration ratio was slightly lower than last year’s (11.1% compared to 11.3% in 2019), and there were again wide variations between countries. The lowest GDP penetration ratio was in Luxemburg (0,5%) and the highest in Belgium (18%). The results of EU GDP penetration ratio dynamics, compared to previous years’ results, show that a decrease in factoring turnover was in line with the decrease of the GDP of EU countries.

2020 was the following year in a row when a share of non-recourse factoring in total turnover grew again. It exceeded 53% of total turnover (52% in 2019 and 50% in 2018). In 2020 both factoring types decreased, but non-recourse was less affected – when recourse factoring turnover fell by 10% y/y,  non-recourse only reduced by 4% y/y. It confirms that risk coverage offered with non-recourse factoring is highly appreciated by companies, especially in times of uncertainty.

The estimated amount of funds made available to 259,000 European businesses in 2020 was 245 bn euro, 11% lower than in 2019. It may suggest that factoring companies, in times of economic uncertainty, reduced the number of clients with poor financial condition or belonging to the industries. It may also be the result of some state supporting measures to businesses to cope with the crisis that reduce the need of funding.

Mrs Françoise Palle-Guillabert, Chairman of the EUF, noted: "The international Covid-19 pandemic has shaken the world in 2020 and continues to affect all of us. The data collated by the EUF show the significant impact on the activity of factors of the sudden shutdown of the economy with the lockdowns and of the absence of invoices to finance. The coming months will be decisive and the EUF is committed to supporting economic recovery”.

Data has been adjusted to ensure that currency exchange rate fluctuations do not distort the results.

For more information and full data analysis:

 EUF Statistics 2020

Discover the Spring Newsletter

Highlights include:

  • Welcome by EUF Chair person
  • Will the EU Commission's Digital Finance Strategy lead to more harmonization of the regulatory framework?
  • First decrease in factoring turnover in 11 years - 2020 EU figures
  • Understanding default risk in purchased receivables under the new definition of default: the opinion of the EUF

cover EUF newsletter Spring 2021

Discover the Autumn Newsletter

Highlights include:

  • Welcome from EUF Chair, Françoise Palle-Guillabert
  • Report from the Legal Committee: national measures to counteract the economic effects of Covid-19-pandemic 
  • Expected drop: 2020 IHEU factoring turnover figures
  • Goodbye 2020, hello DoD
  • EUF and FCI held their first virtual EU Factoring Summit

cover EUF newsletter Autumn 2020

Press Release: EUF and FCI held their first virtual EU Factoring Summit

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Brussels, 6 November 2020

Today the EU Federation and FCI held their first online EU Factoring Summit in the COVID World. The webinar was attended by over 200 participants from around the world.

Françoise Palle-Guillabert, EUF Chairperson, introduced the webinar and highlighted the accomplishments of the EUF since she started her mandate as Chairman in 2018. EUF has numerous achievements including a significant reduction in long term liquidity requirements, NPL (Non-Performing Loans) with a more granular approach to factoring, and AnaCredit for which the EUF obtained some modifications. The association is still working on many advocacy activities including the EBA guidelines on loan origination and monitoring, an effective prohibition of ban on assignment, promotion of factoring as a response to the late payment initiative, implementation of Basel III for which new definition of default and credit insurance will remain sensitive topics. Françoise Palle-Guillabert concludes by highlighting “A great challenge still awaits us for the years to come with sustainable finance. Factoring has a role to play in promoting sustainable growth and development throughout the choice of activities to be accompanied by factors”.

Magdalena Barczak, Chair of EUF Economic and Statistics Committee presented the 2019 final statistics and first half 2020. The final 2019 statistics can be found on EUF website. As expected, 1H 2020 shows the first slow down in EU factoring statistics since 2008 with a drop of -6%. Leading countries in the EU suffered a big slump. Nevertheless, some countries like Germany, Denmark, the Netherlands, Norway, and Poland showed an increase during the first half 2020.

Peter Mulroy, FCI Secretary General presented the global picture of the Factoring Industry, reporting a 5.4% increase in global volume in 2019. However, the figures are much more challenged in 2020.  In comparison to the situation of factoring in the EU, the rest of the world seems to be experiencing more difficulties. Besides the 6% decline in the EU for the first half 2020, FCI also reported a drop of -25% in transaction volume in their EDI platform in the same period, including a drop in Asset Based Lending activity with the same negative figure of -25% as reported by the SFNet in the 2nd quarter 2020.

Patrick de Villepin, FCI Chairman, moderated a panel on the impact of COVID-19 in the EU. Different regions were represented with Magdalena Wessel (DKF, Germany), Fausto Galmarini (Assifact, Italy), Søren S. Larsen (Midt Factoring A/S, Denmark), Andrzej Zbikowski (Polish Factor Association, Poland) and Louis-Marie Durand (Euralia, the public affairs agency of the EUF, representing EU). The panellists agreed that the situation in 2020 is difficult for the factoring industry even if Germany shows better results. The various government initiatives to support the financing of SMEs  helped the economies in the EU during these difficult times.  The future will depend on how the Coronavirus evolves so none of the panellist risked to give a clear vision of the future. But the outlook for 2021 is seen more positively for the global economic situation.

Diego Tavecchia, EUF Chairman of the Prudential and Risk Committee presented the more relevant issues facing the factoring industry in 2020/2021 namely the EBA Guidelines on loan origination and monitoring, the new definition of default and Basel III.

Magdalena Wessel, EUF Chairman of Legal Committee reported on the main legal advocacy issues being “EUNIFICATION” of AML (anti-money laundering), the EU Supply Chain Finance study, the regulatory gap in Rome I-regulation and the review of the late payment directive.

After a short Q&A, Patrick de Villepin finished the online Summit highlighting the important role  the EUF plays for our industry today more than ever and confirming FCI’s support regarding the lobbying of the new definition of default with the EBA. He concluded by saying “Even though we will experience a bumpy year ahead, Factoring will be in high demand once the crisis subsides. In such a difficult environment, companies will look to mitigate the risk of their receivables.

ENDS

Notes to Editors

About EUF

The EUF is the Representative Body for the Factoring and Commercial Finance Industry in the EU. It comprises national and international industry associations that are active in the region. Its members represent 97% of the Industry turnover.

The EUF seeks to engage with Government and legislators to enhance the availability of finance to business, with a particular emphasis on the SME community. The EUF acts as a platform between the Factoring and Commercial Finance Industry and key legislative decision makers across Europe, bringing together national experts to speak with one voice.

Data has been adjusted to ensure that currency exchange rate fluctuations do not distort the results.

For more information and full data analysis:

See our website:                                          www.euf.eu.com

Contact                                                          This email address is being protected from spambots. You need JavaScript enabled to view it.                      This email address is being protected from spambots. You need JavaScript enabled to view it.

About FCI

FCI was set up in 1968 as a non-profit global association for factoring companies around the world. Today, FCI has grown into the world's representative factoring and receivables finance business network and association with close to 400 members in more than 90 countries. Today, FCI is truly the global representative body for the Factoring & Receivables Finance Industry.

FCI offers three major areas of activities:

CONNECT: the Business network supports cross-border factoring activities through which its members cooperate as export and import factors

EDUCATE: FCI promotes and develops best practices in both domestic and international factoring and related Open Account Finance products

INFLUENCE: FCI promotes and defends the Industry with stakeholders and policy makers worldwide

See our website:                        www.fci.nl    

Contact:                                       This email address is being protected from spambots. You need JavaScript enabled to view it.  

EUF-FCI EU Factoring Summit in the COVID world

The annual EU Factoring Summit will take place virtually this year due to the current situation with COVID-19

EUF and FCI join their forces to present the online version of the usual yearly conference. The conference will include presentation of the statistics but also presentations and panel discussion about this special time.

The agenda includes: opening by EUF Chair Françoise Palle-Guillabert that will highlight the EUF actions in 2019-2020. The Factoring Industry in EU by Magdalena EUF Chairman of the Economic and Statistics Committe that will present 2019 final and 2020 first half preliminary statistics. A panel discussion on the impact of COVID-19 in EU chaired by Patrick de Villepin, FCI Chairman. Presentations on EUF main advocacy issues such as EBA Guidelines on loan origination and monitoring, Definition of Default, Basel 3, AML, European Commission Study on Supply Chain Finance by Mrs. Magdalena Wessel, Chairman EUF Legal Committee and Mr. Diego Tavecchia, Chairman of the PRC Committee. The closing speech for the webinar will be by FCI Chairman Mr. Patrick de Villepin.

Please register here

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