MUMBAI, SEPT 11:  Given the increasing demand for factoring services, foreign players such as Development Bank of Singapore (DBS) and GE Capital are getting into the factoring business in India. Both DBS and GE Capital have global exposure in the factoring business. Moreover with the Indian markets becoming attractive, these players are considering India for further expansion. Speaking about the introduction of these services in the country, Pranam Wahi, general manager and chief executive officer, DBS, said, “About a month back we have started providing factoring services as a part of the bank’s operations for our corporate and SME clients. This would enable a better debtor and payables management for corporates.” DBS already caters to its Singapore customers with factoring products.

Meanwhile, even an Australian player, Bibby Financial Services, is considering the option of entering India in the factoring segment. The company already has presence in Poland, UK and also in the USA. According to sources, the company has recently reviewed the market conditions prevailing in the factoring industry and is keen to set up its operations here.

Recently, many banks, especially foreign players, have shown a keen interest in entering into factoring services. Foreign players such as HSBC, Standard Chartered Bank and Citibank already have some exposure in the factoring business. The main beneficiary of this boom would be the small and medium enterprises (SME) since the products have unique features which would facilitate credit flow to SME sectors.

“One of the key reasons that is attracting banks to enter factoring is that the scope for financing large corporates is reaching saturation point, and moreover with interest rates moving northwards, the margins for the banks have dried up substantially. Hence, a logical option for the banks is to tap the SME segment and provide packaged services such as factoring,” said one of the existing factoring players.

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