'Factoring services yet to pick up in India'

Factoring services, a financial alternative to meet the post-sales working capital requirement of various industries, have not yet picked up in India, according to G R Seshadri, managing director, Canbank Factors Limited, Bangalore. "India accounts for only two per cent of the global factoring volume," he added.

Seshadri was speaking at a seminar on 'Factoring services', organised by the Federation of Andhra Pradesh Chambers of Commerce and Industry (Fapcci) and Canbank Factors Ltd, a subsidiary of Canara Bank.

In factoring, the factor (eg Canbank Factors) takes the responsibility of dealing with the receivables of a client from the client's customers and allows prepayment up to 80 per cent of the invoice value. This typically means that factoring enables cash flow for a client even when most of the sales are on credit.