The Latin America factoring services market size is expected to reach 346.02 billion by 2030, registering a CAGR of 11.9% from 2023 to 2030, according to the recent reports of Grand View Research, Inc. The market growth can be attributed to a rise in automation in financial services, expansion of the manufacturing industry, and rise in open account trading and cross-border business. The automation of repetitive and time-taking backend tasks in financial services helps financial institutions to simplify their operations and optimize their credit collection processes. Furthermore, the digitization of accounts receivable processes helps reduce printing costs and ensures more profits for employees. These developments will drive the market during the forecast period. The COVID-19 pandemic has brought in a more collective approach, wherein banks and Supply Chain Finance (SCFs) would work jointly to offer added value to the client environments.
Latin America Factoring Services Market Report Highlights
· The domestic category segment is anticipated to register a steady CAGR during the forecast period
· The increasing effectiveness of electronic invoices and the results of the government’s efforts in several states in the region, such as creating a competitive marketplace and creating high-quality jobs, to boost private consumption (to measure the money spent by the consumers in the country to buy goods and services), is the key driving factor for the segment growth
· The non-recourse type segment is anticipated to observe the fastest CAGR during the forecast period as the non-recourse service providers conduct extensive credit checks and provide credit protection against the awful debts
· The transport & logistics end-use segment is expected to have a considerable CAGR during the forecast period
· The growth is mainly owing to the shifting focus of these companies on instant fundraising systems to improve their service offerings and network
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The industry is anticipated to turn to digital documentation, along with cloud- and AI-based models enhancing the efficiency of services. Banks are projected to become more user-friendly with an accessible site for customers to check their balances, assign invoices, and submit financing requests as needed. Clients can choose banks that employ the most updated, fast, and dynamic digital technology to solve problems, streamline internal operations, and share large volumes of data with their systems. As a result, finance organizations are expected to update their solutions to remain competitive. The increasing adoption of blockchain technology among banks and Non-banking Financial Companies (NBFCs) is driving the growth of the market.
It encourages industry players to make more efforts to improve their services to gain a competitive edge. Furthermore, the growing adoption of Distributed Ledger Technology (DLT) among various SMEs & large enterprises and increased awareness about blockchain DLT applications among various industries are driving the growth of the industry. The technology provides several benefits, such as sending & receiving product information transparently and storing customers’ information securely for different purposes. Such features enabled by blockchain technology are expected to boost the adoption of factoring services in NBFCs and banks during the forecast period. The Argentina regional market will have considerable growth over the forecast period. The country has been focusing on developing its Micro, Small & Medium-sized Enterprises (MSME) production and digital transformation.
For instance, in august 2022, Inter-American Development Bank sanctioned USD 80 million for boosting MSME productivity in Argentina and fostering digital transformation. Such initiatives, targeting digital transformation among MSMEs, are expected to enable MSMEs to opt for factoring services. Key industry players have an extended operating history, a large customer base, and significant competitive strengths. For instance, in December 2022, Tradewind Finance and United Commercial Bank (USB) collaborated for finding solutions to help exporters of Bangladesh by offering receivables-based financial services. The partnership was aimed at providing tailor-made and easy cash flow solutions while creating awareness regarding international factoring services in the region.
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Segmented the Latin America factoring services market based on category, type, financial institutions, end-use, and country:
Latin America Factoring Services Category Outlook (Factoring Volume, USD Million, 2018 - 2030)
· Domestic
· International
Latin America Factoring Services Type Outlook (Factoring Volume, USD Million, 2018 - 2030)
· Recourse
· Non-recourse
Latin America Factoring Services Financial Institution Outlook (Factoring Volume, USD Million, 2018 - 2030)
· Banks
· Non-banking Financial Institutions
Latin America Factoring Services End-use Outlook (Factoring Volume, USD Million, 2018 - 2030)
· Manufacturing
· Transport & Logistics
· Information Technology
· Healthcare
· Construction
· Others (Staffing Agencies, Advertising, Oilfield Services, and Commercial Food & Beverages, among others)
Latin America Factoring Services Country Outlook (Factoring Volume, USD Million, 2018 - 2030)
· Latin America
o Brazil
o Mexico
o Chile
o Peru
o Argentina
o Paraguay
o Uruguay
o Ecuador
o Colombia
o Bolivia
List of Key Players in the Latin America Factoring Services Market
· Accion International
· Barclays Plc
· BNP Paribas
· BTG Pactual
· Deutsche Factoring Bank
· FINAMCO
· Hitachi Capital (U.K.) PLC
· HSBC Group
· Mizuho Financial Group, Inc.
· SMB
· TRADEWIND GmbH
Research Methodology
We employ a comprehensive and iterative research methodology focused on minimizing deviance in order to provide the most accurate estimates and forecasts possible. We utilize a combination of bottom-up and top-down approaches for segmenting and estimating quantitative aspects of the market. Data is continuously filtered to ensure that only validated and authenticated sources are considered. In addition, data is also mined from a host of reports in our repository, as well as a number of reputed paid databases. Our market estimates and forecasts are derived through simulation models. A unique model is created and customized for each study. Gathered information for market dynamics, technology landscape, application development, and pricing trends are fed into the model and analyzed simultaneously.
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About Grand View Research
Grand View Research provides syndicated as well as customized research reports and consulting services on 46 industries across 25 major countries worldwide. This U.S. based market research and consulting company is registered in California and headquartered in San Francisco. Comprising over 425 analysts and consultants, the company adds 1200+ market research reports to its extensive database each year. Supported by an interactive market intelligence platform, the team at Grand View Research guides Fortune 500 companies and prominent academic institutes in comprehending the global and regional business environment and carefully identifying future opportunities.
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