The factoring industry is appealing to the future new government to intervene decisively on the phenomenon of late payments by the Public Administration.
Today in Milan, during a meeting with the press organized to communicate the further growth of market in 2012, the top management of Assifact, the Italian Association for Factoring which brings together operators in the sector, denounced the worsening of a problem which weighs dramatically on Italian companies in a phase of recession like the current one. "By not collecting the fees for the supply of goods and services to the Public Administration - underlined Massimo Ferraris, President of Assifact - they are unable to meet the payments to their supplier companies due to lack of liquidity, moreover in a context of scarce credit . The negative domino effect is evident”.
PAYMENT TIMES IN EUROPE: ITALY IN THE QUEUE
Already looking at payments in general, the Italian situation is by far the most serious among advanced European countries: the average effective duration of trade receivables in Italy (Intrum Justitia 2012 data) is in fact 96 days, with an average payment delay of 31 days. In Germany the duration is only 35 days with a 10 delay, in the United Kingdom 44 days with a 19 delay, in France 57 days with a 17 delay. The gap becomes abysmal considering only the receivables claimed by companies from the Public Administration: the average duration in Italy is 180 days with an average delay of 90 days, against 36 days (11 average delay) in Germany, 43 (18 late) from the United Kingdom and 65 (21 late) from France. The managers of Assifact also presented the data of a research conducted by the same association on a portfolio of 17 billion in credits owed by private companies to the public administration as at 31 December 2011 (and transferred to factoring companies): 60% of the credits analyzed were past due, a quarter of them for over a year. The ranking of bad payers, also according to the Assifact research, largely sees public health bodies in the lead, protagonists of over half (54%) of the total debts overdue over a year.
IF THE STATE PAID IN TIME THE GDP WOULD RISE
The top management of Assifact also cited a research by Finest (European network of studies on financial intermediation) which calculated what would have been the benefit for the Italian economy in 2011 if the State had paid its debts in 30 days, as expected by European standards: a good 5,3 billion euros, equal to 0,33% of GDP, which would thus have grown by 0,83% instead of 0,5%.
In his speech, the Secretary General of Assifact Alessandro Carretta, after underlining how much the extreme lengthening of collection times increases the financial needs of companies, which have serious difficulties in covering working capital, recalled the recent efforts of the outgoing government to give oxygen to the system by reducing the Public Administration's debts to businesses. "The signs are positive - observed Carretta - but the effects have been slowed down due to the still incomplete implementation of the decrees on certifications and the persistence of regulations which in fact allow the Public Administration to suspend payments of the sums due". According to Carretta, the measures adopted so far "have buffered but not substantially changed the situation of hardship and serious penalization in which Italian companies find themselves". Hence the appeal to the future new government to intervene to remedy the situation.
FACTORING 2012: MORE VOLUMES, COMPETITIVE RATES, LESS RISKS
For Italian companies, in financial difficulties due to the scarcity of credit by the banking system, which in turn sees the bad debts worsening, factoring is starting to be once again in 2013 one of the main sources of financing and support. In 2012 the turnover of the sector grew further, exceeding 175 billion euros (over 11% of GDP) with an increase of 3,8% (total market, which becomes 4,3% considering the constant sample) against a drop in GDP of 2,2%. A new increase, estimated at around 2013%, is expected for 4,5.
However, the growth does not translate into greater risk-taking by factoring companies. In fact, the bad debt rate remained at acceptable levels in 2012 as well: 2,87%, against 6,12% for the banking system. Even in terms of interest rates, factoring remains extremely competitive: despite a decrease in 2012 in the rates applied by banks on new business loans, the average rates charged by factoring companies are in line with or even lower than for other financial instruments: 4,36% for transactions over €50 and 6,56% under €50 against bank rates between 8 and 9% for advances and commercial discounts under €100 and above 10% for credit lines in current account. “The competitiveness of our sector – pointed out the General Secretary of Assifact Alessandro Carretta – depends on the fact that in the factoring relationship, contrary to what happens in the case of credit, the factoring company evaluates not only the company that assigns the credits, but also the quality of the credits themselves and therefore of the debtors. In factoring, the risk is therefore lower than in a bank loan".
LOMBARDY AND LAZIO ALONE MAKE 60% OF ITALIAN FACTORING
As at 31 December 2012, almost 60% of the factoring market, in terms of transferor customers (companies that transfer their commercial assets to factoring companies), was located in two regions, Lombardy (31%) and Lazio (29%). Followed by Piedmont (9%), Emilia Romagna (8%), Veneto and Campania (5% each).
Also in terms of location of the assigned debtors, Lazio and Lombardy, respectively with 30% and 20%, were leaders among the regions. According to Assifact estimates, 88% of factoring company customers are private companies, mainly manufacturing (31%) and commerce (15%).
30% of the assigned debtors is represented by the Public Administration.
The factoring industry is appealing to the future new government to intervene decisively on the phenomenon of late payments by the Public Administration.
Today in Milan, during a meeting with the press organized to communicate the further growth of the market in 2012, the top management of Assifact, the Italian Association for Factoring which brings together operators in the sector, denounced the worsening of a problem that weighs dramatically on Italian companies in a recession like the current one. "By not collecting the fees for the supply of goods and services to the Public Administration - underlined Massimo Ferraris, President of Assifact - they are unable to meet the payments to their supplier companies due to lack of liquidity, moreover in a context of scarce credit . The negative domino effect is evident”.
PAYMENT TIMES IN EUROPE: ITALY IN THE QUEUE
Already looking at payments in general, the Italian situation is by far the most serious among advanced European countries: the average effective duration of trade receivables in Italy (Intrum Justitia 2012 data) is in fact 96 days, with an average payment delay of 31 days. In Germany the duration is only 35 days with a 10 delay, in the United Kingdom 44 days with a 19 delay, in France 57 days with a 17 delay. The gap becomes abysmal considering only the receivables claimed by companies from the Public Administration: the average duration in Italy is 180 days with an average delay of 90 days, against 36 days (11 average delay) in Germany, 43 (18 late) from the United Kingdom and 65 (21 late) from France. The managers of Assifact also presented the data of a research conducted by the same association on a portfolio of 17 billion in receivables claimed by private companies from the public administration as at 31 December 2011 (and transferred to factoring companies): 60% of the receivables analyzed was out of date, a quarter of them for more than a year. The ranking of bad payers, also according to the Assifact research, largely sees public health bodies in the lead, protagonists of over half (54%) of the total debts overdue over a year.
IF THE STATE PAID IN TIME THE GDP WOULD RISE
The top management of Assifact also cited a research by Finest (European network of studies on financial intermediation) which calculated what would have been the benefit for the Italian economy in 2011 if the State had paid its debts in 30 days, as expected by European standards: a good 5,3 billion euros, equal to 0,33% of GDP, which would thus have grown by 0,83% instead of 0,5%.
In his speech, the Secretary General of Assifact Alessandro Carretta, after underlining how much the extreme lengthening of collection times increases the financial needs of companies, which have serious difficulties in covering working capital, recalled the recent efforts of the outgoing government to give oxygen to the system by reducing the Public Administration's debts to businesses. "The signs are positive - observed Carretta - but the effects have been slowed down due to the still incomplete implementation of the decrees on certifications and the persistence of regulations which in fact allow the Public Administration to suspend payments of the sums due". According to Carretta, the measures adopted so far "have buffered but not substantially changed the situation of hardship and serious penalization in which Italian companies find themselves". Hence the appeal to the future new government to intervene to remedy the situation.
FACTORING 2012: MORE VOLUMES, COMPETITIVE RATES, LESS RISKS
For Italian companies, in financial difficulties due to the scarcity of credit by the banking system, which in turn sees the bad debts worsening, factoring is starting to be once again in 2013 one of the main sources of financing and support. In 2012 the turnover of the sector grew further, exceeding 175 billion euros (over 11% of GDP) with an increase of 3,8% (total market, which becomes 4,3% considering the constant sample) against a 2,2% drop in GDP. A new increase, estimated at around 2013%, is expected for 4,5.
However, the growth does not translate into greater risk-taking by factoring companies. In fact, the bad debt rate remained at acceptable levels in 2012 as well: 2,87%, against 6,12% for the banking system. Even in terms of interest rates, factoring remains extremely competitive: despite a decrease in 2012 in the rates applied by banks on new business loans, the average rates charged by factoring companies are in line with or even lower than for other financial instruments: 4,36% for transactions over €50 and 6,56% under €50 against bank rates between 8 and 9% for advances and commercial discounts under €100 and above 10% for credit lines in current account. “The competitiveness of our sector – pointed out the General Secretary of Assifact Alessandro Carretta – depends on the fact that in the factoring relationship, contrary to what happens in the case of credit, the factoring company evaluates not only the company that assigns the credits, but also the quality of the credits themselves and therefore of the debtors. In factoring, the risk is therefore lower than in a bank loan".
LOMBARDY AND LAZIO ALONE MAKE 60% OF ITALIAN FACTORING
As at 31 December 2012, almost 60% of the factoring market, in terms of transferor customers (companies that transfer their commercial assets to factoring companies), was located in two regions, Lombardy (31%) and Lazio (29%). Followed by Piedmont (9%), Emilia Romagna (8%), Veneto and Campania (5% each).
Also in terms of location of the assigned debtors, Lazio and Lombardy, with 30% and 20% respectively, were leaders among the regions.
According to Assifact estimates, 88% of factoring company customers are private companies, mainly manufacturing (31%) and commerce (15%).
30% of the assigned debtors is represented by the Public Administration.
