EU Federation for the Factoring and Commercial Finance Industry

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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

Research EUF Publications

EU Federation for Factoring and Commercial Finance webinar: building bridges between Finance and SMEs

Brussels, October 14th, 2020 – Stéphanie Yon-Courtin, MEP (Renew Europe) chaired yesterday a webinar organized by the EUF and dedicated to SMEs’ funding.

Moderated by Fausto Galmarini, vice chairman of the EUF, the event gathered top EU policy makers, Stéphanie Yon-Courtin, Member of the European Parliament and Vice-Chair of the Economic and monetary affairs committee (ECON), Andrea Beltramello, cabinet member of Executive Vice-President Valdis Dombrovskis, factoring providers and EU and national SMEs’ representatives from France, Germany and Italy.

Welcomed by Françoise Palle Guillabert, Chair of the EUF, the panelists shared their expertise, experience and analysis of the ongoing crisis. They also developed the issues that SMEs are facing in obtaining funding, initiatives of the European institutions and solutions provided by finance players.

Stéphanie Yon-Courtin recalled the commitment of the Renew Europe towards the SMEs and asked for more ambition from the EU institutions. She reminded the work already done at the European Parliament, notably through the Capital market union INI report that aims to foster equity financing for SMEs via notably equity research for SMEs, a European Fund for IPOs, a simplification of SMEs’ prospectus, solvency instruments or better tax incentives. Among all the sources of funding, she also noted that factoring could be part of the solution.

Françoise Palle Guillabert added that by providing € 275 billion of working capital financing to 280,000 businesses in 2019 (87% of which are SMEs), factoring can be the bridgehead of a finance serving the economy. She also made an overview on the main EU regulatory topics of interest for the factoring industry, from the EBA guidelines on loan origination and monitoring, the definition of default and the Basel III implementation in the EU. Patrick de Villepin, Chairman of FCI, underlined that European factoring represents more than two third of the worldwide turnover, providing a bulk of services for SMEs: financing, guarantee against insolvency and cash collection.

Alban Maggiar, President of SMEunited, tackled the difficulties EU SMEs are currently experiencing. In June 2020, 80% of SMEs reported a loss of turnover due to lockdown and other crisis measures and 40% of them reported liquidity problems. In that context, the relevance of factoring as tool of finance for SMEs is highly welcomed as it contributes to liquidity and increases cashflow. He also called for pursuing the cooperation between all stakeholders to get the best financial solutions for SMEs.

Andrea Beltramello presented the EU Commission’s initiatives to foster liquidity and ensure productive capacity in tough economic times (first during the pick of the COVID-19 crisis and then today in this “recovery” time) which is essential for SMEs and their staff. He explained the key would be to strengthen the economic resilience of the EU and to make the recovery as fair and inclusive as possible via the diversifications of the sources of funding.

Theses interventions were then tested against the real-world experience of three SMEs or Companies operating with SMES, coming from Germany (Paulus Korste - Crombeen GMBH), France (Sebastien Celeri - Architect), and Italy (Paolo Lualdi – CFO Cremonini SpA). They talked about their operational challenges in obtaining funding and how factoring had provided an effective solution.

At the end of the workshop Fausto Galmarini thanked all the panelists for their effective contribution to the discussion and underlined the need of an actual support from the Governments and the Regulators by means of measures coherent with the importance of the SMEs in the real economy and the role played by the Factors for their funding.     

The link to the recorded event is available by clicking on this link.

SYC workshop 2

Online Workshop BUILDING BRIDGES BETWEEN FINANCE AND SMES

“SMES’ ACCESS TO FINANCE: A NEW “FINANCING MIX” TO BE SET UP WITHIN THE EU”

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The 2020 ECB lending survey showed that the demands for loans or drawing of credit lines from firms have surged during the second quarter 2020 and reached the highest net balance since the survey was launched in 2003. The COVID-19 outbreak has highlighted an existing problem faced by European SMEs: the need for larger and more diversified funding opportunities.

As economic reality and funding access are different among EU Member States, this online workshop will gather SMEs from all the EU. They will testify and discuss their day to day funding issues and needs in front of representatives from the European Parliament, the European Commission and the financial industry. EU representatives will develop the ongoing European initiatives to bring closer SMEs and financial players, such as the Capital Markets Union.

By providing € 275 billion of working capital financing to 280,000 businesses (of which 87% are SMEs) in 2019, factoring can symbolize the bridgehead of a “finance serving the economy”. In direct link with the day-to-day business, factoring has become a key financing tool for SMEs, and was described in the 2020 European Commission’s study “as an effective solution to combat cash flow issues and improve working capital, also in the context of a credit crunch and persistent late payment” and in the 2018 European Parliament INI report as an “innovative type of payment” and a means to avoid SMEs bankruptcy due to late payment.

To register, please click here

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