Factoring gains ground

Last year’s decline in ROL loan interests and especially the encouraging prospects in this field led to an accelerated development of the factoring services on the Romanian market, with the turnover derived by banks from this product increasing more than ten times over the last six years. A survey by Factors Chain International (FCI) – the association of the entities that provide this financial package, shows the Romanian companies ran 225 million euros’ worth in contracts through factoring, compared with only 20 million euros in 1998 for instance. Factoring is the possibility offered by banks to economic operators thereby the latter have their receivables on the merchandise supplied discounted. This service has become attractive as a result of the interest rate drop, as the interest is deducted from the amount the merchant has to collect. ZF