Romanian factoring market is half the European average

The Romanian factoring market has a big growth potential, say companies in the sector, considering that the market’s share in the gross domestic product is half the European average, with increasingly more companies choosing to sell their invoices in order to secure cash at a time when access to classic funding lines from banks is limited.
In Romania the factoring market accounts for just 1.5% of the gross domestic product (GDP), compared with the 3% European average and with the 9-10% share of developed countries.
In Poland the share of the factoring market to GDP was slightly down last year, to 2.2%, whilst in Hungary it remained steady over the last few years, at 3.2% of GDP. The largest factoring market is UK’s, with such businesses accounting for over 10% of GDP.
The Romanian factoring market has seen a fast growth in the past few years, as the number of players rose, but their businesses made up as little as 0.7% of GDP just three years ago.
The market continues to be dominated by banks, with the BCR, BRD and UniCredit Tiriac Bank cumulating a 71% market share, according to UniCredit data. At the same time, competition has started to tighten, with the market having recently seen the entry of Portuguese-held Millennium Bank and of Maltese group FIMBank, which, in partnership with RomFactor, will offer a platform for factoring services in Romania and the Republic of Moldova.
The Romanian factoring market reached 1.97 billion euros last year, up 77% against 2007. This year, despite the significant growth potential, players are expecting stagnation in the value of discounted invoices with companies focusing more on risk management and less on high turnovers.
The largest number of requests came in 2008 from companies in the transportation, constructions, steel and food industries. At present, there is a big growth potential on the pharmaceutical market, where a lot of invoices are due to be reimbursed by the Romanian Health Insurance House.