The German factoring market: Industry figures
Factoring grows by more than 7%
(Berlin, 23rd of April 2018) The turnover of the members of the German factoring association (Deutscher Factoring-Verband e.V.) increased by 7.2% to a new total of 232.4 billion Euro. The number of clients increased even more dynamically by more than 33%. Currently, more than 36,000 clients use factoring as an alternative method of financing. The members of the German factoring association represent around 98% of the factoring market organized in associations in Germany, measured by the factoring turnover. The figures of the German factoring association are therefore the leading benchmark of the whole German factoring market.
For the first time, the factoring ratio, i.e. the ratio between the volume of purchased receivables (according to the turnover of the members of the German factoring association) and the gross domestic product (GDP), of 7.1% exceeded the magical seven-percent-threshold.
„The factoring turnover increased encouragingly by 7.2%, that’s growth for the eight year in a row. This proves that factoring is by now firmly established in the area of SME financing“, Joachim Secker summarizes the development as spokesman of the German factoring association´s executive board.
The current turnover clusters document once more the importance of factoring in SME financing: Based on the number of clients, nearly 93% are to be found in the typical SME-segment of 0 to 10 million Euro factoring turnover (an increase of 1.7% in comparison to 2016). This group of nearly 93% of clients stand for approximately 58% of the whole factoring turnover. In contrast, around 2% of the factoring clients are to be found in the big ticket-turnover cluster of 50 million Euro and more, which generates more than 24% of the factoring turnover. Hence, factoring is suitable for financing both small and larger enterprises.
Healthy growth both nationally and internationally
In contrast to last year, the increase rates in the national factoring business (plus 7.8%) and the international factoring business (plus 5.6%) were at rather close quarters: The international factoring business now amounts to 71.8 billion Euro p.a. „Made in Germany“ is still in worldwide demand, Germany exported goods and services for more than 1.2 trillion Euro into world (plus 6.3%), which is rather close to the increase rate in export factoring (plus 5.6% to 68.1 billion Euro p.a.). Import factoring increased similarly by 5.5% to 3.7 billion Euro p.a.
Ranking of countries and regions
Eastern Europe and the Benelux continue to be the top two regions in the ranking list of the most important factoring partner countries and regions. The impending Brexit apparently shows no effect, at least not on factoring: Quite the contrary, United Kingdom, which is already outside the Eurozone, moved up three marks and is now on the ranking list’s third position (2016: sixth position). In contrast, Germany‘ sdirect neighbour Austria dropped by two marks and is now in fifth position. Asia dropped by remarkable five marks. The USA’s ranking turned out positive, improving by two marks to eighth position while Switzerland and Italy also pushed forward by one mark each.
In the year under review, there werehardly any changes in the most important industries for factoring: Positions one to three (trade/trade negotiation, manufacturing of metal products and machines, services) remained unchanged. Vehicle construction, manufacturing of chemical products and metal production and processing as well as the healthcare sector improved by one mark each. Electronics and electronic components even moved up two marks.
B2C-Factoring almost doubled
Again in 2017, inhouse factoring dominated and covered 77.4% of the market, full service factoring increased once more to now 16.1% (plus 0.8% in comparison to 2016), and with 6.5%, maturity factoring remained just below its score of 2016.
It is remarkable that B2C-factoring increased by 92.9% and therefore nearly doubled to now 12.2 billion Euro. This dynamic growth illustrates that channels of distribution become increasingly modern („online trade“) and that also service providers from the healthcare sector are recognizing factoring as a form of financing, the consumer sector thereby gaining importance.
Due to the increasing regulatory burden, also in border areas of factoring, the members‘ medium-term outlook is more cautious than last year: Nearly 3% of the association’s members foresee a very good development (minus nearly 4%), 41% foresee a good development (in contrast to 48% for 2017) and 55% predict an at least satisfactory business development for 2018 (45% for 2017)
Also in 2018, factoring remains a stable and reliable partner of German SME financing!
Deutscher Factoring-Verband e.V.
Dr. jur. Alexander M. Moseschus, Verbandsgeschäftsführer/managing director
Behrenstr. 73, 10117 Berlin
Tel.: +49-(0)30-20 654 654, Fax: +49-(0)30-20 654 656