The German factoring market:
Industry figures 2016: Factoring continues to grow by nearly 4% in comparison to 2015
(Berlin, 19.04.2017) The turnover of the members of the German factoring association (Deutscher Factoring-Verband e.V.) increased once more in 2016, this time by 3.77% to 216.8 billion Euro. More than 27,250 clients are now using the advantages of factoring as an alternative method of financing, an impressive plus of 33.8% and proof that factoring is on the rise, especially in the SME sector.
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), remained stable at 6.9% and is strategically still aiming for the 7%-threshold.
„Fortunately, factoring grew moderately in 2016, which is a sound result especially with regard to the market situation and the excess liquidity“, Joachim Secker as spokesman of the German factoring association´s executive board summarizes the development. 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.
The current turnover clusters exemplify the growing use of factoring in the SME sector: Based on the number of clients, nearly 91% are to be found in the typical SME-segment of 0 to 10 million Euro factoring turnover. In 2016, this group of nearly 91% of clients represented almost 60% of the whole factoring turnover (a plus of nearly 15% in comparison to 2015). In contrast, less than 3% of the factoring clients are to be found in the big ticket-turnover cluster of 50 million Euro and more, which accounts for nearly 25% of the factoring turnover.
Export factoring boomed
Growth in 2016 was driven by the international factoring business. „Made in Germany“ was in worldwide demand, Germany exported goods and services worth more than 1.2 trillion Euro around the world. This new top mark was also reflected in the export factoring business, which increased by 15.6% to 64.5 billion Euro – another record result. However, the import factoring business was flagging in 2016 and went down by 8.9%.
As imports increased even more strongly than exports on a macroeconomic scale in 2016, this result for the import factoring business is somewhat surprising and will therefore be subject to statistical scrutiny in the next years.
Interesting changes could be noted in the rankings of the most important partner regions and countries for factoring, where Eastern Europe and the Benelux continued to be the top two regions. Once more, Germany’s neighbour Austria improved its position by two marks and is now the third most important country in the international factoring business. Italy dropping by two marks is cause for some concern, as this could be a sign that the economic problems in the „boot of Europe“ may be more profound than expected. Asia also dropped by two marks, which is not a good sign either. Great Britain’s Brexit has however not (yet?) been put into practice in the factoring industry. The UK even improved by one mark, just like the non-Euro alpine stronghold Switzerland.
There was hardly any movement among the top 5 of the most important industries for factoring: trade/trade negotiation, manufacturing of metal products and machines, services, vehicle construction and nutrition/food still dominate. The freight forwarding industry proved to be mobile by gaining 4 marks in the ranking.
Once more in 2016, inhouse factoring with its 77.8% dominated over the 15.3% of conventional Full Service Factoring (in comparison to 13.5% in 2015). This growth in Full Service Factoring may be indicative of the increasing demand for factoring solutions in the SME sector. Maturity Factoring remained nearly unchanged at just under 7%.
The factoring market is in a state of flux: The numbers of licenses issued by the German financial supervisory authority BaFin increased slightly in 2016 - for the first time since 2008. More market participants seem to lay their focus on factoring in Germany. The German factoring association accepted 8 new members in the course of 2016, a plus of more than 30% in comparison to 2015. Moreover, FinTechs are becoming more and more active in the factoring business and will therefore continue to stir the industry in 2017.
Due to the positive developments within the factoring industry, the medium-term outlook of the association’s members is clearly optimistic: 6% of the members foresee a very good development, 48% of the members foresee a „good“ and another 45% an at least „satisfactory“ business development, while there were no worse forecasts.
Despite all risk factors on the global, but also European scale, factoring remains a stable and reliable partner for the financial planning of small as well as large business in Germany.
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