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Presented By:

Mehak Nanda (14)

Pahul Walia (18)
Sultan Mohammad (24)
Tanu Aggarwal (25)
The word Factor has been derived from
the Latin word Facere which means to
make or to do or to get things done

Factoring may broadly be defined as the
relationship, created by an agreement,
between the seller of goods/services and a
financial institution called the factor,
whereby the latter purchases the receivables
of the former and also controls and
administers the receivables of the former.
Who is factor?
Factor is a financial institution that specializes
in purchasing receivables from business firms.

Factor assumes the risk of collection of
receivables and on the event of non payment
by debtors/customers bears the risk of bad
debt and losses
According to Peter M Biscose:-
Factoring may also be defined as a continuous
relationship between financial institution (the
factor) and a business concern selling goods
and/or providing service (the client) to a trade
customer on an open account basis, whereby the
factor purchases the clients book debts (account
receivables) with or without recourse to the client -
thereby controlling the credit extended to the
customer and also undertaking to administer the
sales ledgers relevant to the transaction.
The study group appointed by International Institute
for the Unification of Private Law (UNIDROIT), Rome
during 1988 recommended, in simple words, the
definition of factoring as under:
Factoring means an arrangement between a factor
and his client which includes at least two of the
following services to be provided by the factor:
Maintenance of accounts
Collection of debts
Protection against credit risks.

Factoring is a specialized activity whereby a
firm converts its receivable into cash by selling
them to a factoring organization.
Client :- Client is the person who wants to sell
the commodity to the customer.
Customer :- Customer is the person who wants
that commodity but he do not have sufficient
Factor :- Factor enters into agreement with the
client for rendering factor services to it. The
factor receives payment from the buyer on due
dates and remits the money to seller after usual

The mechanism of factoring is summed up as below:
i. An agreement is entered into between the selling
firm and the firm. The agreement provides the basis
and the scope understanding reached between the
two for rendering factor service.
ii. The sales documents should contain the
instructions to make payment directly to the factor
who is assigned the job of collection of receivables.
iii. When the payment is received by the factor, the
account of the firm is credited by the factor after
deducting its fees, charges, interest etc. as agreed.
iv. The factor may provide advance finance to the
selling firm conditions of the agreement so require.


1. Recourse and Non-recourse Factoring

2. Advance and Maturity Factoring

3. Conventional or Full Factoring

4. Domestic and Export Factoring

5. Limited Factoring

6. Selected Seller Based Factoring

7. Selected Buyer Based Factoring

8. Disclosed and Undisclosed Factoring

Recourse and Non-recourse

In a recourse factoring arrangement, the factor
has recourse to the client (selling firm) if the
receivables purchased turn out to be bad, then
the risk of bad debts is to be borne by the client
and the factor does not assume credit risks
associated with the receivables. Thus the factor
acts as an agent for collection of bills and does
not cover the risk of customers failure to pay
debt or interest on it.
Whereas, in case of non-recourse factoring, the
risk or loss on account of non-payment by the
customers of the client is to be borne by the
factor and he cannot claim this amount from the
selling firm. Since the factor bears the risk of
non-payment, commission or fees charged for
the services in case of nonrecourse factoring is
higher than under the recourse factoring.

The additional fee charged by the factor for
bearing the risk of bad debts/non-payment on
maturity is called del credere commission.

Advance and Maturity Factoring
Under advance factoring arrangement, the factor pays
only a certain percentage (between 75 % to 90 %) of the
receivables in advance to the client, the balance being
paid on the guaranteed payment date. As soon as
factored receivables are approved, the advance amount
is made available to the client by the factor. The Factor
charges discount/interest on the advance payment
from the date of such payment to the date of actual
collection of receivables by the factor.
In case of maturity factoring, no advance is paid to
client and the payment is made to the client only on
collection of receivables or the guaranteed payment
data as the case may be agreed between the parties.
Thus, maturity factoring consists of the sale of
accounts receivables to a factor with no payment of
advance funds at the time of sale.
Conventional or Full Factoring
Under this system the factor performs almost all
services of collection of receivables, maintenance of
sales ledger, credit collection, credit control and credit
insurance. The factor also fixes up a draw limit based
on the bills outstanding maturity wise and takes the
corresponding risk of default or credit risk and the
factor will have claims on the debtor as also the client
creditor. It is also known as Old Line Factoring.

Factoring agencies like SBI Factors are doing full
factoring for good companies with recourse.

Domestic and Export Factoring
The basic difference between the domestic and
export factoring is on account of the number of
parties involved.
In the domestic factoring three parties are
involved, namely:
1. Customer (buyer)
2. Client (seller)
3. Factor (financial intermediary)

All the three parties reside in the same country.

Export factoring is also termed as cross-
border/international factoring and is almost similar to
domestic factoring except that there are four parties to
the factoring transaction. Namely, the exporter (selling
firm or client), the importer or the customer, the
export factor and the import factor.

Since, two factors are involved in the export Factoring,
it is also called two-factor system of factoring.

Two factor system results in two separate but inter-
related contracts:
1. between the exporter (client) and the export factor.
2. Export factor and import factor.

The import factor acts as a link between export factor
and the importer, helps in solving the problem of
legal formalities and of language.

He also assumes customer trade credit risk, and
agrees to collect receivables and transfer funds to the
export factor in the currency of the invoice.

Export/International factoring provides a non-
recourse factoring deal.

The exporter has 100 % protection against bad debts
loss arising on account of credit sales.

Limited Factoring
Under limited factoring, the factor discounts
only certain invoices on selective basis and
converts credit bills into cash in respect of those
bills only.

Selected Seller Based Factoring

The seller sells all his accounts receivables to the
factor along with invoice delivery challans, contracts
etc. after invoicing the customers.

The factor performs all functions of maintaining the
accounts, collecting the debts, sending reminders to
the buyers and does all consequential and incidental
functions for the seller.

The sellers are normally approved by the factor
before entering into factoring agreement
Selected Buyer Based Factoring
The factor first of all selects the buyers on the basis of
their goodwill and creditworthiness and prepares an
approved list of them.

The approved buyers of a company approach the
factor for discounting their purchases of bills
receivables drawn in the favor of the company in
question (i.e. seller).

The factor discounts the bills without recourse to
seller and makes the payment to the seller.
Disclosed and Undisclosed
In disclosed factoring, the name of the factor is mentioned
in the invoice by the supplier telling the buyer to make
payment to the factor on due date.
However, the supplier may continue to bear the risk of
bad debts (i.e. non-payments) without passing to the
The factor assumes the risk only under nonrecourse
Factoring agreements.
Generally, the factor lays down a limit within which it will
work as non-recourse. Beyond this limit the dealings are
done on recourse basis i.e. the seller bears the risk.
Under undisclosed factoring, the name of the
factor is not disclosed in the invoice.

But still the control lies with the factor. The
factor maintain sales ledger of the seller of
goods, provides short-term finance against the
sales invoices but the entire transactions take
place in the name of the supplier company


The purchase of book debts or receivables is
central to the function of factoring permitting
the factor to provide basic services such as:
1. Administration of sellers sales ledger.
2. Collection of receivables purchased.
3. Provision of finance.
4. Protection against risk of bad debts/credit
control and credit protection.
5. Rendering advisory services by virtue of their
experience in financial dealings with

1. Administration of Sales Ledger

The factor assumes the entire responsibility of
administering sales ledger.
The factor maintains sales ledger in respect of
each client.
When the sales transaction takes place, an invoice
is prepared in duplicate by the client, one copy is
given to customer and second copy is sent to the
2. Collection of Receivables

The factor helps the client in adopting better credit control
The main function of a factor is to collect the receivables
on behalf of the client and to relieve him from all the
botherations/ problems associated with the collection.
This way the client can concentrate on other major areas of
his business on one hand and reduce the cost of collection
by way of savings in labor, time and efforts on the other
The factor possesses trained and experienced personnel,
sophisticated infrastructure and improved technology
which help him to make timely demands on the debtors to
make payments.

3. Provision of Finance

Finance, which is the lifeblood of a business, is made
available easily by the factor to the client.
A factor purchases the book debts of his client and debts
are assigned in favor of the factor. 75% to 80 % of the
assigned debts is given as an advance to the client by the
a. Where an agreement is entered into between the client
(seller) and the factor for the purchase of receivables
without recourse, the factor becomes responsible to the
seller on the due date of the invoice whether or not the
buyer makes the payment to the factor.
b. Where the debts are factored with recourse- the client has
to refund the full finance amount provided by the factor in
case the buyer fails to make the payment on due date.
4. Protection Against Risk

This service is provided where the debts are factored
without recourse.
The factor fixes the credit limits (i.e. the limit up to
which the client can sell goods to customers) in
respect of approved customers.
Within these limits the factor undertakes to purchase
all trade debts and assumes risk of default in payment
by the customers.

The factor not only relieves the client from the
collection work but also advises the client on the
creditworthiness of potential customers.

Thus the factor helps the client in adopting better
credit control policy.

The credit standing of the customer is assessed by
the factors on the basis of information collected from
credit rating reports, bank reports, trade reference,
and financial statement analysis and by calculating
the important ratios in respect of liquidity and
profitability position.

5. Advisory Services

These services arise out of the close relationship between
a factor and a client. Since the factors have better
knowledge and wide experience in field of finance, and
possess extensive credit information about customers
standing, they provide various advisory services on the
matters relating to:

a) Customers preferences regarding the clients products.
b) Changes in marketing policies/strategies of the
c) Suggest improvements in the procedures adopted for
invoicing, delivery and sales return.
d) Helping the client for raising finance from
banks/financial institutions, etc.

Legal aspects of factoring
Factoring contract is like any other sale- purchase
agreement regulated under the law of contract. There is no
codified legal framework / code to regulate factoring
services in India. Some of the contents of a factoring
agreement and legal obligations of the parties are listed as

The client gives an undertaking to sell and the factor
agrees to purchase receivables subject to terms and
conditions mentioned in the agreement.
The client warrants that the receivables are valid
enforceable, undisputed and recoverable. He also
undertakes to settle disputes, damages and deduction
relating to the bills assigned to the factor.
The client agrees that the bills purchased by the factor on a
non-recourse basis (i.e. approved bills) will arise only from
transactions specifically approved by the factor or those
falling within the credit limits authorized by the factor.
The client agrees to serve notices of assignments in the
prescribed form to all those customers whose receivables
have been factored.
The client agrees to provide copies of all invoices,
credit notes, etc., relating to the factored accounts, to the
factor and the factor in turn would remit the amount
received against the factored invoices to the client.
The factor acquires the power of attorney to assign the
debts further and to draw negotiable instruments in
respect of such debts.
The time frame for the agreement and the mode of termination
are specified in the agreement.
The legal status of a factor is that of an assignee. The customer
has the same defense against the factor as he would have against
the factor as he would have against the client.

The customer whose account has been factored and has been
notified of the assignment is under legal obligation to remit the
amount directly to the factor failing which he will not be
discharged from his obligation to pay the factor even if he pays
directly to the client remits the amount to the factor.

Before factoring a receivable, the factor requires a letter of
disclaimer from the bank which has been financing the book debts
so that the bank will not provide post-sales finance as the factor
provides the same.
The firm has to guarantee that the book debts are free from any
rights of a third party in the factoring agreement.
The factor has sometimes to act quickly to recover money due on
an invoice. The agreement must provide for the factor to act
swiftly in his name, whenever necessary.

The factoring agreement sets out in detail how the firm s to be
The attraction of factoring for many companies is the non-
recourse factoring which depends on whether the debt is approved
or not, which is decided before the factoring process starts.

If any of the customers pay it to the client by mistake, the
agreement provides that the firm must hold the money for the
factor. If he does not do so, this is effectively a breach of trust and
the firm may be held responsible for any losses incurred by the
Some warrants that are required are:
(a) The firm should disclose any materials facts that it knows
might affect the factors decision to approve a debt.
(b) It has to warrant that the invoices sent for factoring
represents a proper debt for goods supplied.
The factor may require the customer
to notify it immediately in case of
disputed debts. The firm may be
expected to return any advances made
to it in respect of the disputed debt.

The factors power to inspect the
firms books and accounts and the
period of the factoring arrangements is
usually laid down in the agreement.
The client undertakes:

To have the factor serve as the sole factor (clients occasionally
may have more than one factor but that is more exception than
the rule);
To provide a satisfactory assignment together with actual
invoices and evidence on delivery:
To submit all the sales to the factor prior to shipping for
credit approval.
To grant the factor the right to hold any balances standing to
its credit as security for any debts owed by the client to the
factor, no matter how arising.
The factor on the other hand undertakes:
To purchase bonafide accounts receivables that it has
previously approved;
To charge interest on sum advanced at a certain defined
interest rate;
To advance against the purchase
price, at its discretion, a
percentage thereof and to remit
the balance on the monthly
average due date of receivables
assigned plus 5 to 10 days for

To render a statement of account
Evaluation Framework
The evaluation framework should be on a consideration of the
relative costs and benefits associated with the two alternatives to
receivables management. They are:
management by
the firm.
Factoring services
(recourse or non-
Cost Associated With In- House
Cash Discount
Cost of funds invested in receivables
Bad Debts
Lost contribution on forgone sales
Avoidable costs of sales ledger administration and credit
Cost Associated With Recourse Or Non
- Recourse Factoring
Factoring commission
Discount charge
Cost of long- term funds invested in receivables.
Cash Discount
Cost of funds invested in
Lost contribution on forgone
Avoidable costs of sales ledger
administration and credit
Cash Discount
Cost of funds invested in
Bad Debts
Lost contribution on forgone
Avoidable costs of sales ledger
administration and credit
With Non -
Factoring And Balance Sheet
The impact of factoring on Balance Sheet is exhibited below:
Balance Sheet of ABC Co. Ltd. (Before Factoring)
Liabilities Amount(Rs) Assets Amount(Rs)
Bank Borrowings
Against Inventory
Other Current
Net Working


Other Current
Total 20,00,000 Total 20,00,000
Current Ratio = Current Assets / Current Liabilities
= Rs. 20,00,000 / Rs. 15,00,000 = 1.33 : 1
Balance Sheet of ABC Co. Ltd. (After Factoring 80% of
Liabilities Amount(Rs) Assets Amount(Rs)
Bank Borrowings
Against Inventory
Other Current
Net Working



Due from factor
Other Current

Total 13,60,000 Total 13,60,000
Current Ratio = Current Assets / Current Liabilities
= Rs. 13,60,000 / Rs. 8,60,000
Reduction of Current Liabilities.
Improvement in Current Ratio and Efficiency.
Higher credit standing.
Reduction of cost and expenses.
Factoring And Profit And Loss Account
The Benefits of factoring in terms of the profit and loss account
are analyzed as under:
The factor performs basis functions like administration of
sellers sales ledger, credit control, collection of dues, etc. This
saves the administration costs.

The improved liquidity position enables the firm to honor its
obligations without any delay.

The improved credit standing helps the firm to get the benefits
of lower purchase price, longer credit period from suppliers, trade
discount on bulk purchases, cash discount on early payment,
better market standing, quicker sanction of loans and advances,
and better terms and conditions while borrowing etc.
The following are the important assumptions made in
constructing the statement:
The average receivables of the firms are equal to two months
All sales are on credit basis.
Cost of goods sold is equal to 60% of the sales.
Administration costs (which includes credit department expenses
of Rs. 2,00,000) and selling costs are assumed to be Rs. 8,00,000
and Rs. 16,00,000 respectively.
The bad debts loss percentage is 5% of gross value of sales.
The factor charges 2% commission on gross value of sales.
The interest charged by the factor as well as by other financial
institutions on advance is assumed to be 18% per annum.
The margin money is 10%.Material cost is saved by 2.5% on
account of lower prices, trade discount, cash discount, etc.
Profit and Loss Account of ABC Co. Ltd (Before Factoring)
Particulars Amount
(in Rs.)
Particulars Amount (in
To Material cost
To Labour cost
To Factory Expenses
To Gross Profit
By Sales 120,00,000
120,00,000 120,00,000
To Administrative
To Credit Dept. Expense
To Selling Expenses
To Bad debts
To Interest on loan
To Net Profit

By Gross Profit 48,00,000
48,00,000 48,00,000
Interest on loan = Rs. 1,20,00,000 x 2/12 x 18/100
= Rs. 3,60,000
Particulars Amount (in
Particulars Amount (in Rs.)
To Material cost
To Labour cost
To Factory Expenses
To Gross Profit
By Sales 120,00,000
120,00,000 120,00,000
To Administrative
To Selling Expenses
To Factoring Commission
@ 2%
To Interest on advance
To Net Profit


By Gross Profit 48,90,000
48,90,000 48,90,000
Where, Material cost = Rs. 36,00,000 2.5% of Rs. 36,00,000 = Rs.
Amount of advance = Average receivables Commission @ 2% on sales
10% reserve.
= Rs. 1,20,00,000 x 2/12 Rs. 2,40,000 10% x Rs. 1,20,00,000 x 2/12
= Rs. 20,00,000 Rs. 2,40,000 Rs. 2,00,000 = Rs. 15,60,000.
Interest on Advance = 18% of Rs. 15,60,000 = Rs. 2,80,800.
Particulars Amount (in Rs.) Amount (in Rs.)
Benefits of Factoring:
Savings in Material costs
Credit Dept. Expenses
Bad Debts losses avoided
Interest on loan

Less: Costs of factoring:
Factoring Commission
Interest on Advance




Net Benefits of Factoring 7,29,200 7,29,200
The Profit and Loss Account and its summary clearly
indicate that the overall profitability of ABC Co. Ltd. is
increased by Rs. 7,29,200. This increase the ROI and
dividend rate, if the management so desires.
Background and Terms of Reference
Kalyanasundaram Report
Purchaser of goods and services often delay payments, resulting
in working capital problems for the suppliers, particularly the
SSI units.

The RBI had initiated a series of measures to alleviate the
difficulties of the suppliers.

However, banks have not been effective in implementing these
measures due to operational constraints.

The RBI perceived the extension of factoring service as one of
the measures to assist in the expeditious collection of
Kalyanasundaram Report
The Kalyanasundaram Group was constituted to
examine the feasibility and mechanics of starting
factoring services/ organizations. Its terms of reference

1) Consideration of need and scope for one / more
factoring organization;
2) Nature of their constitution; in public, private or
joint sector;
3) Changes in legal framework for promoting
4) Feasibility of extension of factoring service to
exporters; and
5) Other matters relating to factoring.
Need for Factoring Services in India and
Assessment of Demand:
There is sufficient scope for the introduction of
factoring services in India, which would be
complementary to the services provided by banks.

The introduction of export factoring services in
India would provide an additional facility to

With a view to attaining a balanced dispersal of
risks, factors should offer their services to all
industries and all sectors of the economy.
Recommendations of the Kalyanasundram
Factoring service in India is of recent origin. It owes its
genesis to the recommendations of the
Kalyanasundaram Study Group appointed by the RBI
in 1989.

Pursuant to the acceptance of these recommendations,
the RBI issued guidelines for factoring services in 1990.

The first factoring company SBI Factors and
Commercial Ltd (SBI FACS) started operation in April
The main recommendations of the
Committee/Group are listed as follows: -
sufficient scope for introduction factoring services in
export factoring services would provide additional
facility to exporters.
demand for factoring services would grow within a
period of two/three years.

On the export front, there would be a fairly good
availment of various services offered by export factors.
for attaining a balanced dispersal of risks, factors
should offer their services to all industries and all
sectors in the economy.
The pricing of various services depend upon the cost of funds.
Factors should attempt to keep the cost of funds as low as
possible, not exceeding 13.5 percent per annum, so that a
reasonable spread is available.

The RBI could consider allowing factoring organizations to raise
funds from the Discount and Finance House of India Ltd.

The price for financing services would be around 16 per cent per
annum and the aggregate price for all other services may not
exceed 2.5 percent to 3 percent of the debts services.

In the beginning only select promoter institutions/groups of
individuals with good track record in financial services and
competent management should be permitted to meter into this
new field.
Initially the organizations may be promoted on a zonal basis.
There are distinct advantages in the banks being associated
with handling of factoring business. it would be desirable to
have only four or five organizations which could be
promoted by banks.

Factoring activities could perhaps be taken up by the SIDBI,
preferably in association with one or more commercial

The business community should first be educated.
support of computers, as quick and dependable means of

setting up specialized agencies for credit investigations.
proper linkage between banks and factoring organizations.

The factoring of SSI units could to be mutually beneficial to
both factors and SSI units.

To operate in the international market, India may ratify
and accept the Unidroit convention on international

An element of competition is absolutely necessary for
ensuring satisfactory service to the exporters.

Expeditious steps may be taken by government to promote
RBI Guidelines:
Banks are permitted to set up separate
subsidiaries/invest in factoring companies.

should not engage in financing of other companies or
other factoring companies.

Investment of a bank cannot exceed in the aggregate
10% of paid-up capital and reserves of the bank.

According to the RBI guidelines (2010), banks now
with the prior approval of RBI can form subsidiary
companies for undertaking the factoring services and
other incidental activities.
Review of existing guidelines:
The companies carry out all the components of a standard
factoring activity, viz., financing of receivables, sale-ledger
management and collection of receivables.
They derive at least 80 per cent of their income from
factoring activity.
The receivables purchased/financed, irrespective of whether
on 'with recourse' or 'without recourse' basis, form at least
80 per cent of the assets of the Factoring Company.
The assets/income referred to above would not include the
assets/income relating to any bill discounting facility
extended by the Factoring Company.
Advantages of Factoring:
Increases working capital
Avoid additional liabilities
Improves credit monitoring
Reduces administrative cost
Reduce supplier credit costs
Protection against bad-debts in case of non-
Better management of the organization
Disadvantages of Factoring:
Possible harm to
customer relation
Company image
Bill Discounting
Trading or selling a bill of exchange prior to the
maturity date at a value less than the par value
of the bill. The amount of the discount will
depend on the amount of time left before the bill
matures, and on the perceived risk attached to
the bill.
Difference b/w Factoring & Bill Discounting
1. Recourse with or without recourse. Always with recourse.
2. Collector Factor is the collector of
Drawer is the collector of the
3. Ownership Factor purchases the trade debt
and thus becomes a holder for
Financier acts simply as an agent
of his customer and he does not
become the owner.
4. Services Also provides other services like
sales ledger maintenance and
advisory services.
Only financing facility is
5. Rediscounting Debts purchased for factoring
cannot be rediscounted.
Discounted bills may be
rediscounted several times before
they mature for payment.
6. Mode of
It is an off-balance sheet
No such possibility.
Forfaiting is a form of financing of receivables
pertaining to international trade. Forfaiting is
the purchase of a series of credit instruments
such as drafts, bills of exchange, other freely
negotiable instruments on a nonrecourse basis.
Difference b/w Factoring & Bill Discounting
1. Extent of Finance Usually 75-85% of the value of
the invoice is considered for
100% Financing.
2. Recourse May be with or without
Always without recourse.
3. Type of transaction Either domestic transaction or
export transaction.
Always export transaction.
4. Services Provided other allied services are
It is a pure financing
5. Maturity Advances are short-term in
Advances are generally
medium term spread over 3-
5 years.
6.Exchange rate
It does not guard against
exchange rate fluctuations.
Forfaiter charges a premium
for such risk.
Factoring in India
SBI Factors and Commercial Services (SBI FACS) Ltd
Canbank Factors Ltd
Foremost Factors Ltd (FFL)
Global Trade Finance Ltd (GTF)
The Hongkong and Shanghai Bank Corporation
Limited (HSBC)
Export Credit Guarantee Corporation of India Ltd.
India Factoring and Finance Solutions Pvt Ltd (India

Subsidiary of State Bank of India.
1st factoring company to be set up in India.
incorporated in February 1991 & commenced
business operations from April 1991.
SBI and its 2 associate banks have a 70% stake in
SBI Factors while 20% is held by SIDBI and 10%
by Union bank of India.
offers Domestic Factoring with recourse and
without recourse, purchase bill factoring, factoring
of Usance Bills etc.
jointly promoted by the Canara Bank, Andhra
Bank and SIDBI in August,1992.
its Rs. 10 crore paid-up capital was contributed in
the proportion of 60:20:20 by three promoters
Initially operated in the south zone but regional
restrictions on their operations were subsequently
removed by the RBI.
main services provided by the Canbank Factors
Ltd are domestic factoring and invoice
Foremost Factors Ltd
incorporated in February 1996.
promoted by Mohan Group and Nations Bank
Overseas Corporation of U.S.A. along with 20th
Century Finance Corporation Limited (TCFC Limited)
and ICDS Group as institutional investors.

Changed its name to IFCI Factors Limited as when
IFCI acquire the share capital of the company in 2008-
major services are domestic sales bill factoring,
purchase bill factoring, export sales bill factoring and
corporate loan.
Global Trade Finance Ltd
joint venture between EXIM Bank, Indias premier
export finance institution, International Factoring
Corporation(IFC) Washington, FIN Bank, Malta and
Bank of Maharashtra.

incorporated on March 13, 2001 with a paid-up capital
of Rs. 45 crore.

Offers export-financing solutions such as Forfaiting
and Factoring for small and medium sized Indian
exporters (SMEs)
only factoring company in India to offer online web
access to its clients for accessing their accounts.
it introduces its own direct factoring services in
1997-98 to help small scale sector in timely
recovery of their sale proceeds.

Factoring scheme of SIDBI is a comprehensive
package of receivables management service
including advance against invoices and other
allied services such as collection of proceeds from
the purchaser, administration of sales ledger etc.

aims to ensure adequate liquidity at all times.
The Hongkong and Shanghai Bank
Corporation Limited
discontinued providing factoring services in the year
2008 after providing this service for a period of 5 years.
It has now re-launched the product with a few changes
concentrating majorly on MSMEs.
Services provided by HSBC are: Domestic Factoring,
Invoice Factoring and Export Factoring.
The Export Credit Guarantee Corporation of
India Limited is a company wholly owned by
the Government of India.
initially set up Export Risks Insurance Corporation
(ERIC) in July 1957.

transformed into Export Credit and Guarantee
Corporation Limited (ECGC) in 1964 and to Export Credit
Guarantee of India in 1983.

introduced non-recourse maturity export factoring. But
later ECGC restructured its maturity factoring scheme
and finally launched full fledged factoring scheme.
established in December 2009.

providing trade finance services for small and medium
enterprises (SMEs) and small-scale industries with a
special focus on the ever-increasing international
(export and import) and domestic factoring.

The objective of the Company is to provide factoring
and forfaiting services, encompassing finance and value
added services, efficiently and competently.