Reverse Factoring Market To Reach $1,179.32 Billion By 2030

Reverse Factoring Market Growth & Trends

The global reverse factoring market size is estimated to reach USD 1,179.32 billion by 2030, growing at a CAGR of 11.4% from 2023 to 2030, according to the recent reports of Grand View Research, Inc. The reverse factoring or supply chain financing (SCF) market’s growth can be attributed to the growing need for alternative financing solutions in Micro, Small & Medium Enterprises (MSMEs) to improve their cash flow.

Further, reverse factoring, or SCF, offers various benefits, such as developing long-term relationships between suppliers & buyers, improved balance sheet efficiency, and smoother cash flow, supporting the growth of the supply chain financing market. The COVID-19 pandemic affected the overall reverse factoring industry due to disruptions in business operations and supply chains. However, from early 2021 with ease in lockdown, the end-use companies preferred reverse factoring into their business models to accelerate product development and production and gain a competitive edge over their rivals.

The MEMSs are facing various challenges in raising their working capital owing to the limited availability of adequate financing solutions. To overcome this challenge, MSMEs have shifted their focus towards factoring and reverse factoring solutions to streamline their cash flows, which is anticipated to support the reverse factoring industry’s growth globally. Various countries' governments, such as India, Canada, and Japan, are taking supportive initiatives to assist MSMSs in raising working capital and supporting market growth.

For instance, in January 2021, the Reserve Bank of India (RBI) allowed non-deposit-taking NBFC and Investment Credit Companies (ICCs) with assets of around USD 130 million and above to provide various factoring services, including SCF and bill discount facilities to MSMEs. It helped MSMEs get immediate liquidity instead of waiting for bills to be honored by customers.

The increasing demand for reverse factoring solutions globally is encouraging market players to adopt various business opportunities, supporting the growth of the industry. For instance, in December 2022, eFactor Network and Trafigura Pte. Ltd., a company operating in the commodities industry, announced that they are collaborating with several financial institutions and piloting a Sustainable Supply Chain Finance program for mining companies based in Mexico.

The program envisaged strengthening mining companies' working capital while encouraging responsible sourcing practices throughout the value chain. The program particularly envisaged leveraging eFactor Network's digital factoring platform to provide Trafigura Pte. Ltd.'s suppliers of metal concentrates with accelerated payments for products.

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Reverse Factoring Market Report Highlights

• The international segment is expected to register a CAGR of 14.4% from 2023 to 2030. Rapid development in reverse factoring solutions, which facilitates efficient cross-bordering reverse factoring, and a significant rise in international trading is expected to fuel the segment growth in the forecast period

• The non-banking financial institutions segment is anticipated to grow at a CAGR of 13.0% from 2023 to 2030. The remarkable segment growth can be attributed to transparency and flexibility in reverse factoring solutions offered by these financial institutions to their clients. Moreover, non-banking financial institutions are adopting various advanced technologies to attract potential business customers and give tough competition to banks, supporting segment growth

• The healthcare segment is anticipated to grow at a CAGR of 13.9% from 2023 to 2030. Various entities in the healthcare industry, such as medical equipment providers, medical billing & transcription service providers, nurse staffing agencies, ambulatory services, laboratory services, home health agencies, and health centers & hospitals, are using reverse factoring to easily access the cash and improve their business operations

• The Latin America segment is anticipated to grow at a CAGR of 18.0% from 2023 to 2030. The growth can be attributed to the rising awareness about the benefits of reverse factoring which is encouraging industry stakeholders such as governments, associations, and market players to introduce enhanced reverse factoring in the region

Reverse Factoring Market Segmentation

Grand View Research has segmented the global reverse factoring market based on category, financial institution, end-use, and region:

Reverse Factoring Category Outlook (Factoring Volume, USD Billion, 2018 - 2030)

• Domestic

• International

Reverse Factoring Financial Institution Outlook (Factoring Volume, USD Billion, 2018 - 2030)

• Banks

• Non-banking Financial Institutions

Reverse Factoring End-use Outlook (Factoring Volume, USD Billion, 2018 - 2030)

• Manufacturing

• Transport & Logistics

• Information Technology

• Healthcare

• Construction

• Others (Retail, Food & Beverages, Among Others)

Reverse Factoring Market Regional Outlook (Factoring Volume, USD Billion, 2018 - 2030)

• North America

  • U.S.

  • Canada

• Europe

  • Germany

  • U.K.

  • France

  • Italy

  • Spain

• Asia Pacific

  • China

  • India

  • Japan

  • South Korea

  • Australia

• Latin America

  • Brazil

  • Mexico

  • Chile

  • Peru

  • Argentina

  • Paraguay

  • Uruguay

  • Ecuador

  • Colombia

  • Bolivia

• Middle East & Africa

  • U.A.E

  • Saudi Arabia

  • South Africa

List of Key Players in the Reverse Factoring Market

• Accion International

• Banco Bilbao Vizcaya Argentaria, S.A.

• Barclays Plc

• Credit Suisse Group AG

• Deutsche Factoring Bank

• Drip Capital Inc.

• eFactor Network

• HSBC Group

• JP Morgan Chase & Co.

• Mitsubishi UFJ Financial Group, Inc.

• PrimeRevenue, Inc.

• Societe Generale

• Trade Finance Global

• TRADEWIND GMBH

• Viva Capital Funding, LLC