RO
The Romanian Factoring Association (ARF) has released its mid-year market study, revealing an approximately 8% increase in the factoring market compared to the same period in 2023. As a result, the total factoring market volume has reached €4.33 billion.
ARF conducts market research at both mid-year and year-end, based on data provided by its members (banks and non-banking financial institutions), as well as non-members, while also estimating the activity of other market players.
“At mid-year last year, the factoring market stood at €4 billion, reaching €8.3 billion by the end of 2023—an annual increase of 10% compared to 2022. This year, we are maintaining the same steady growth trend, with significant year-over-year figures. One of the key drivers of this expansion is the growing confidence among businesses that rely on factoring as a financing solution. The benefits are evident for both suppliers and the companies purchasing their goods and services. A significant contributor to this year’s market performance is reverse factoring, which accounted for nearly half of the total growth at mid-year. Over the past decade, reverse factoring has played a crucial role in market expansion and has significantly increased annual volumes,” explains Bogdan Roșu, President of ARF.
Reverse Factoring: A Key Driver of Market Growth
Unlike traditional factoring, reverse factoring is initiated by the buyer of goods or services—typically large Key Account companies—together with the financing institution. According to ARF’s study, reverse factoring accounted for 43% of the domestic factoring market in the first half of 2024. Meanwhile, domestic factoring grew by 7%, while international factoring expanded by 13% compared to the same period last year.
Key Industries Driving Factoring Demand
The FMCG (Fast-Moving Consumer Goods) sector leads the ranking of industries utilizing factoring solutions, representing 17% of total domestic factoring transactions, with a volume exceeding €636 million.
The second-largest sector is Automotive, Machinery, and Equipment, with factoring transactions reaching €516 million, accounting for 14% of the market.
The IT&C sector ranks third, with €429 million in factoring transactions, representing 12% of the total market.
In export factoring, 56% of the volume is generated by companies in the Metals, Chemicals, Water, and Recycling sectors, totaling approximately €300 million, compared to €275 million in 2023.
Factoring Adoption by Company Size
Among companies utilizing domestic and export factoring in the first half of 2024:
- Large companies (with revenues exceeding €50 million) accounted for 43% of total factoring volumes.
- Medium-sized companies (with revenues between €5 million and €50 million) held a 37% market share, up from 33% in 2023.
- Small businesses (with revenues below €5 million) maintained a 20% share, the same as in 2023.
Regional Performance in Factoring
In terms of regional contributions, the Bucharest-Ilfov region led the market with €2 billion, representing 53% of total factored receivables.
The South-Muntenia region followed, with €436 million in factoring transactions.
A remarkable surge was recorded in the North-East region, where factoring transactions increased from nearly €10 million in 2023 to approximately €114 million in 2024.
Market Growth Drivers and Economic Context
*”The growth of the factoring market in the first half of 2024 is driven by a mix of internal and external factors. Internally, the diversification of factoring products has attracted a broader range of clients. Additionally, increased projects financed through the National Recovery and Resilience Plan (PNRR) have stimulated numerous economic sectors. Other contributing factors include high consumer spending fueled by rising public sector wages, persistently high inflation, and increased demand from SMEs. Many SMEs, facing limited access to traditional bank financing, have turned to factoring to improve cash flow and finance working capital.
Externally, Europe’s modest economic growth has maintained stable demand for Romanian products, indirectly supporting export factoring. Furthermore, national and European regulations have fostered a more predictable business environment, allowing factoring solutions to be better integrated into companies’ financial strategies.
The positive trajectory of Romania’s factoring market in the first half of 2024 underscores the sector’s resilience in the face of both domestic and global economic challenges. Factoring continues to be an essential tool for businesses, enabling effective risk management and financial stability amid sustained demand from both domestic and international markets,”* adds Bogdan Roșu.