India Factoring sets eyes on small and medium enterprises in Maharashtra

India Factoring & Finance Solutions Pvt Ltd, a joint venture of the state-owned Punjab National Bank (PNB), along with Malta-based FIM Bank Group, Italy- based Banca IFIS, and Blend Financial Services, Mumbai, is expanding its factoring services across Maharashtra and cities like Pune, Nashik, Nagpur and Aurangabad for entrepreneurs, small and medium enterprises (SMEs) and small-scale industries to provide much needed liquidity for their business.

Factoring is a financial transaction where a business sells its accounts receivable to a third party called ‘factor', which undertakes the activity of financing the receivables, administrating the debt and collection of the same.

Commenting on this, Sudeb Sarbadhikary, CEO of India Factoring said, "With its changing SMEs and SSIs environment, Maharashtra has a gigantic potential to grow small and medium enterprises (SMEs) and small-scale industries and there is a need for factoring and other trade finance services to support them. SMEs are the key for the growth for any developing country. In India, SMEs generate the second largest employment opportunity after agriculture and it contribute around 40 per cent of the country’s export. We are committed towards the development of factoring services which in turn will assist of the growth and efficacy of small scale industries. Growth in SME will result in increase in employment and facilitate GDP growth."

Answering on the question why the sector is not very demanding, Sarbadhikary said, "It will grow in the next five years as Factory Laws has been amended in January and the new bill is passed. There were some ambiguities in the previous laws. It will help the sector and de-risk the issues.

According to Sarbadhikary pharma, IT, auto and manufacturing are the prominent sectors for lending money where recovery of payment is assured where as sectors like real estate, telecom and power have some difficulties to finance.

The company lends minimum Rs 1 crore to maximum Rs 20 crore for the SMEs. India Factoring is planning to double the size of their business by end of 2013. Currently, the size of its business is Rs 2300 crore.

India Factoring is facilitating financial solutions to more than 200 SMEs in Delhi, Mumbai, Chennai, Bangalore, Kolkata, Ahmedabad and Hyderabad.