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First Attempts to Size the SCF Market

The SCF market is still  evolving - it is a competitive business and business undertaken is covered by customer/bank confidentiality and therefore sources of information are constrained and not widely in the public domain.

The receivables financing segment including factoring, invoice discounting and receivables finance in all its forms remains the largest segment with an estimated 60% market share. It is primarily domestic in focus and is likely to experience steady growth.  Banks, bank owned subsidiaries and a variety of non- bank financial institutions are the main providers. Country practices vary widely.

Buyer-centric SCF techniques, such as Reverse Factoring and Approved Payables Finance, represent less than 30% of the market but have strong growth potential. Global banks are today mainly concentrated on the large buyer side of the trade equation and this is the heritage of the cleverly structured solutions engineered and provided by banks for large international trading companies. It will need a ‘tipping point’ to see these instruments taker-off on a broad scale really take off.

Inventory and pre-shipment finance is quite specialised and not widely practised outside certain industries and commodities. These practices hold a 10% share in market size, with a predicted growth in the next 5 years.

 

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Comments: (2)

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 31 August, 2012, 12:23Be the first to give this comment the thumbs up 0 likes

Like all first attempts, I'm sure yours will also face many challenges! Best wishes. I notice that LCs and Open Accounts are conspicuous by their absence. Keen on knowing if you'd treat them as part of some other category than SCF. 

Enrico Camerinelli
Enrico Camerinelli - Aite Group - Boston 01 September, 2012, 08:13Be the first to give this comment the thumbs up 0 likes

Open Account instruments and LCs are indeed part of SCF. What I've learned, though, is that it takes time to educate the market to consider them as such.

Enrico Camerinelli

Enrico Camerinelli

Supply Chain Blockchain Personal Coach

Aite Group

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This post is from a series of posts in the group:

Financial Supply Chain

In the world of international trade, the process of exchanging payments, information and documents between buyers, sellers, banks, and other involved parties is becoming increasingly important for financial institutions. This community aims at presenting views and innovative ideas related to this financial supply chain space.


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