Reverse Factoring Market Report 2024

This Reverse Factoring market report covers market characteristics, size and growth, segmentation, regional and country breakdowns, competitive landscape, market shares, trends and strategies for this market. It traces the market's historic and forecast market growth by geography.

The reverse factoring market size has grown strongly in recent years. It will grow from $492.72 billion in 2023 to $539.51 billion in 2024 at a compound annual growth rate (CAGR) of 9.5%. The growth during the historic period can be attributed to the growing recognition of the benefits of supply chain finance, the increasing adoption of digital technologies, a greater focus on optimizing working capital, and the need for improved cash flow management.

The reverse factoring market size is expected to see strong growth in the next few years. It will grow to $777.88 billion in 2028 at a compound annual growth rate (CAGR) of 9.6%. The growth during the forecast period can be attributed to the demand for optimizing working capital, rising costs of traditional financing, increased demand from the manufacturing industry, advancements in reverse factoring technology, the growing importance of supply chain finance, and the rising popularity of online reverse factoring platforms. Key trends during this period include the introduction of innovative financing solutions, integration with supply chain finance, advancements in emerging technologies, the development of sophisticated financial infrastructure, and the creation of value-added services.

The growth of the reverse factoring market is anticipated to be driven by the increasing adoption of reverse factoring by manufacturers. Manufacturers, who produce goods using labor, machinery, and raw materials, are adopting reverse factoring to improve supplier cash flow and maintain stable supply chain operations amid financial difficulties. This financial solution enhances liquidity for suppliers, minimizes payment disputes, and stabilizes production schedules. For example, in December 2021, the United Nations Industrial Development Organization (UNIDO), an Austria-based governmental body, reported that global manufacturing production grew by 3.3% in the fourth quarter of 2021 compared to the same period in 2020. This follows growth rates of 5.8% and 17.8% in the two previous quarters. Hence, the rising adoption of reverse factoring by manufacturers is contributing to the expansion of the reverse factoring market.

Key players in the reverse factoring market are focusing on developing advanced solutions such as digital reverse factoring to gain a competitive advantage. Digital reverse factoring allows suppliers to receive early payment for invoices, often at a lower cost of capital compared to what they could secure independently. For instance, in April 2022, Eurobank Factors, a Greece-based factoring services provider, introduced a digital reverse factoring solution designed to assist small and medium-sized enterprises (SMEs) in accessing financing based on the creditworthiness of their larger buyers. This approach allows suppliers to convert invoices into cash without additional collateral, while buyers can improve their working capital and strengthen supplier relationships. The digital platform simplifies the reverse factoring process by enabling suppliers to submit invoices for early payment, which are then validated by the buyer. Eurobank Factors provides financing to the supplier for a small fee and collects payment from the buyer on the invoice's due date. This system enables suppliers to secure lower-cost funding based on the buyer's credit rating rather than their own.

In December 2022, Endesa S.A., a Spain-based electric utility company, collaborated with Banco Bilbao Vizcaya Argentaria (BBVA), CaixaBank, and Santander to introduce the circular reverse factoring solution. This partnership aims to boost supplier competitiveness by enhancing financing conditions by 35% to over 50%, depending on their commitment to the circular economy and sustainability. Banco Bilbao Vizcaya Argentaria, S.A. is a Spain-based financial services group, CaixaBank, S.A. is a Spain-based financial institution, and Santander is a Spain-based financial service provider.

Major companies operating in the reverse factoring market are ICBC China Limited, JPMorgan Chase & Co., Bank of America Corporation, Banco Santander S.A., HSBC Holdings plc, Citigroup Inc., Wells Fargo & Company, Banco do Brasil S.A., ING Groep N.V., Barclays plc, Societe Generale SA, Banco Bilbao Vizcaya Argentaria S.A., Deutsche Bank AG, Sumitomo Mitsui Banking Corporation, UniCredit S.p.A., Mizuho Financial Group Inc., Standard Chartered PLC, KBC Group NV, CaixaBank S.A., Accion International, PrimeRevenue Inc., Drip Capital Inc., Viva Capital Funding LLC, eFactor Network S.A.P.I. de C.V., Tradewind GmbH.

Europe was the largest region in the reverse factoring market in 2023. The regions covered in the reverse factoring market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa.

The countries covered in the reverse factoring market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

Reverse factoring is a financial arrangement in which a buyer enables early payment to its suppliers through a financial institution. The institution pays the suppliers at a discount, with the buyer guaranteeing full payment of the invoice on the original due date. This process optimizes working capital for both buyers and suppliers by allowing suppliers to receive early payments while helping buyers support their suppliers' cash flow needs.

Reverse factoring is categorized into domestic and international types. Domestic transactions occur within a single country's borders, while international transactions involve cross-border operations. Financial institutions involved in reverse factoring include banks and non-banking financial institutions. This arrangement is utilized by various industries such as manufacturing, transport and logistics, information technology, healthcare, construction, and others.

The reverse factoring market research report is one of a series of new reports that provides reverse factoring market statistics, including reverse factoring industry global market size, regional shares, competitors with an reverse factoring market share, detailed reverse factoring market segments, market trends, and opportunities, and any further data you may need to thrive in the reverse factoring industry. This reverse factoring market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenario of the industry.

The reverse factoring market includes revenues earned by entities by providing services such as discount fees, additional service fees, and volume-based fees. The market value includes the value of related goods sold by the service provider or included within the service offering. Only goods and services traded between entities or sold to end consumers are included.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD, unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.


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