Improving the SMEs Access to Trade Finance DRAFT
in the OIC Member States
26
Figure 8: Growth of International Factoring Volumes
Source: Factors’ Chain International/ICC, 2013
With global factoring volumes approaching €1 trillion, about a third of this activity relates to
cross-border factoring, as shown below in an illustration of total international cross-border
factoring volumes from 2009 to 2012.
The Export Credit Guarantee Company of Egypt (ECGE) includes both international and
domestic factoring among its service offerings. On the international front, ECGE leverages its
membership in Factors Chain International to provide both import and export factoring
services:
1 - Export Factoring:
ECGE provides export factoring service which is a package of financial services
including finance, protection and collection through the purchase of export sales
invoices without recourse.
2- Import Factoring:
ECGE offers “Import Factoring” service including issuing guarantees on Egyptian
importers to the export factor, in order to facilitate importation from foreign suppliers
through open account transactions without cash collateral or bank guarantees.
Source: Export Credit Guarantee Company of Egypt, 2013
Even emerging solutions in the trade finance space are being acknowledged as important to
the conduct of global trade. Supply chain finance, through programs aimed at granting access
to finance for SME suppliers on the back of the borrowing capacity of large buyers, is
enhancing the overall health and viability of key international supply chains, arguably reducing
the overall cost of financing and enhancing the ability of buyers to manage strategic suppliers.
“…the credit differential among investment grade buyers and their SME suppliers is
wide enough in the current funding market to make the credit arbitrage of reverse
factoring an attractive way to improve liquidity for both buyers and suppliers. For
example, SCF programs allow buyers to extend payment terms from 60 to 120 days
while providing suppliers access to better financing rates (e.g., 120 days at 100 bps
instead of 60 days at 500 bps). According to industry sources, SCF could unlock $100