With the significant increase recorded in 2018 (+8,32%), the turnover of factoring in Italy has doubled in the last ten years: from 121,935 billion euros in 2008 to 240,039 in 2018, with an average annual growth rate of 7,19%. Also for 2019 the prospect is for a further increase, estimated at 4,75% at the end of the year after a sprint start: +19,3% in January and +21,7% in February on the corresponding months of 2018.
At a European level, the factoring turnover reached 1.729 billion euros, with an increase of 8% on 2017. A clear increase, exceeding 5%, also at a global level: worldwide factoring moves 2.730 billion euros. Italy is one of the leading countries with 14% of the European market and 9% of the world market.
The data on the development of a financial business in Italy today worth 14% of GDP and used by 33 businesses, almost half (47%) small and medium-sized, 29% in the manufacturing sector, were illustrated to the press today, during the Annual Press Meeting, by the top management of Assifact, the Italian for Factoring which brings together operators in the sector. The president Fausto Galmarini and the general secretary Alessandro Carretta underlined the growing function of factoring as the real engine of the country's productive economy.
FACTORING SOLUTION AGAINST PAYMENT DELAYS
Thanks to factoring operations, companies can immediately collect their trade receivables and optimize the management of working capital - also through advances - at competitive costs compared to bank loans, without risking being brought to their knees by late payments. According to the surveys of the DAP, the Database on payment habits of Assifact, the average payment time for an invoice in Italy is 74 days (34 days the European average calculated by Intrum Iustitia), with particularly serious delays by the Public Administration : 104 days the average payment time against 40 of the European average.
A QUARTER OF THE PAYBAL DEBTS DUE OVER A YEAR
As at 31 December 2018, almost 11 billion outstanding loans out of the more than 67 in total in the portfolio of factoring companies see entities and companies in the public sector as debtors. Approximately 37% of corporate credits are due from Central Administrations and approximately 32% from Healthcare Sector Entities. Overdue credits are around 34% of the total, of which 67% have been overdue for over a year; in essence, approximately 23% of the receivables due from the Public Administration (almost a quarter) have been overdue for over a year.
THE HEALTHCARE CASE
The sector of the entities of the National Health Service is the one with the highest percentage of overdue: 41%. “In addition to lengthy payment times - underlined the president of Assifact Fausto Galmarini - unfortunately another bad habit is spreading which negatively affects businesses, which with factoring companies increasingly encounter obstructionist behavior in the assignment of receivables which have claims against entities in the health sector; which, in many cases, systematically refuse factoring operations or issue resolutions providing for a general refusal and refusal for all transfers that should reach the entity, also with the indication of inserting specific clauses prohibiting the transfer of assets in the contracts their debts”. In the observation period (2017-2018) there were 134 entities that refused at least one assignment of their supply debts not attributable to supply problems or that issued resolutions aimed at not accepting any assignment of their supply debts. 19 regions, approximately 55% of the total number of National Health Service entities surveyed by Assobiomedica.
FINTECH: REVERSE FACTORING TAKES OFF (+36%) FROM DIGITAL PLATFORMS
There was a significant increase in the use of so-called reverse factoring, which in Italy today represents 9% of transactions (+36% in 2018 compared to 2017): it is a formula that is used in the supply chain on the initiative of the leading supply chain: in this case it is the debtor (hence the definition of "reverse" factoring) who favors access to financing and the assignment at the best conditions of the trade receivables that the suppliers claim against him and which he recognizes from the company factoring. The affirmation of reverse factoring is favored by the development and dissemination of ad hoc digital platforms, in many cases created by innovative startups that are multiplying in this emerging fintech segment. The potential market of supply chain finance is worth over 500 billion euros in Italy.
LOWER BAD LOANS (2,25%) AND LOWER INTEREST RATES THAN BANKS
The credit quality in factoring is always high: gross non-performing exposures as at 31 December 2018 fell to 5,23% of the total, while the incidence of non-performing loans is at its lowest level in recent years: only 2,25% of total exhibits.
Also thanks to the contained risk levels of the operation, the general secretary Alessandro Carretta recalls that “For companies, financing with factoring has an absolutely competitive cost: the average global effective rate is 5,01% for transactions up to 50.000 euros and only 2,60% over 50.000, compared to bank rates which for advances and discounts are 7,06 .50.000% up to 5,03 euros, 50.000% from 200.000 to 3,10 and 200.000% over 10,74, rates which for current account credit facilities rise to 5.000% up to 8,40 euros XNUMX% over ”.
THE PROPOSALS OF FACTORING TO SUPPORT THE PRODUCTIVE ECONOMY
During the Annual Press Meeting, the top management of Assifact launched a series of proposals to improve factoring operations for the benefit of companies:
· Eliminate the risk of clawback in transactions involving the assignment of trade receivables against payment of the consideration pursuant to Law 52/91. This would result in undoubted benefits for companies in terms of greater possibility of accessing the disinvestment of credits, reduction of disbursement times and costs.
· Facilitate the purchase of receivables due from the Public Administration, modifying the reference rules contained in the Procurement Code.
· Opposing, regardless of the desirable regulatory interventions, certain behaviors of public debtors aimed at generalized refusals of credit assignments (in the absence of objective reasons).
Amend the Directive against late payments, also with reference to the issue of the nullity of the non-assignability clauses of commercial credits
Recognize the peculiarities of factoring in the context of the European prudential supervisory regulation on the capital requirements of banks/intermediaries in relation to its low risk and differentiate the treatment for overdue receivables deriving from commercial transactions
· Do not further extend the use of split payment (payment of VAT on purchases directly to the Treasury instead of to the supplier company).
