India Factoring to go international

Having been granted licence, ‘India Factoring’ is planning to venture in the international factoring in the last quarter of FY12. India Factoring and Finance Solutions is a joint venture of Punjab National Bank, Malta-based credit institution- FIM Bank Group, Italy-based Banca IFIS and Blend Financial Services of Mumbai.

Talking to Business Standard, Sudeb Sarbadhi-kary, CEO, India Factoring, revealed they have been granted licence by the RBI to start ‘international factoring’ and would be starting the business from last quarter of this financial year.

Till now India Factoring was mainly focusing on domestic factoring but with the grant of the licence, the company is eyeing 70:30 model, i.e. 70 per cent business from domestic and 30 per cent from exports, in coming years.

Factoring is the process of sale of accounts receivable to the seller (of goods) from the buyer, to the third party, called factor, which undertakes the activity of financing the receivables, administrating the debt and collection of the same.

Sudeb Sarbadhikary was here to announce launching of their factoring business to Punjab and Haryana for entrepreneurs and small and medium enterprises (SMEs).

From seven offices at present, the company is looking to scale up the operations and plans to open offices in Jaipur, Chandigarh, Pune and Coimbatore.

Commenting on the future plans of the company, Sudeb Sarbadhikary added, the company was aiming to be the leader in factoring business in the next three years. With outstanding assets pegged at Rs 700-800 crore, India Factoring is looking to double the booking size and business growth in the coming years.

In India, the ‘factoring business’ is estimated to be a Rs 30,000-crore industry, growing at 10 per cent every year.

Sudeb Sarbadhikary maintained once the proposed factor Bill is cleared by Parliament, it would prove to be a watershed for the factoring business in India. The factoring business in India is bound to grow once the bill is ratified by Parliament as it would increase the competition, which is good for the industry.