Factoring has taken place!

What are the main trends in the market factoring in the first half of 2008? The first half was rather complicated. At all influenced by the financial crisis that manifested itself early in the year, not openly, but the summer has felt much stronger. I'm afraid that by the end of this year impact of the crisis will intensify even more, at least the second half is not as quiet as last year. All companies will be forced to restructure their development strategies, and those factors that have made it before, obviously, will win. The first trend - is the emergence of new players. The Russian factoring market had a few periods when there are new players. So, in 2002, appeared NFC and started working. Then he created EUROKOMMERZ, we followed - "TRUST", about the same time, PSB has to offer factoring services, but then began its activities Petrocommerce. And then in 2006-2007 there was a certain calm: if the new players and it appears it is not very active. They have achieved certain volume, but despite this, their position in the market remains small. And here in the first half of 2008, Coface entered the Russian market as a partner of the NFC, and a number of our companies and banks have announced their serious intentions. Alfa-Bank, with both financial and human resources for the development of factoring, factoring, said about a large scale project. However, his career began with the dumping, which is not entirely explicable in terms of future prospects in this market. Said the interest in factoring and Savings Bank, but most likely he will provide factoring services is not earlier than 2010. Thus, it is clear that interest in the market factoring exhibit serious players. The second trend - a selection of some specialized factoring companies those market participants who had previously provided factoring services as an appropriate division of the bank. Generally speaking, the concept of the factoring market, subject to the availability of a separate specialist company as part of a banking group is ideal, since, on the one hand, an independent business, and on the other hand, have access to the resources of the bank. With regard to financial aspects, in the first half was an increase of rates to attract financial resources, but at the same rates to customers have not changed, although their growth is possible in the second half. Also worth noting is the fact that earned the Association of Factoring Companies. We have many ideas for aspects of the work of the Association, which by the end of the year should bring fruitful results in promoting the factoring, the creation of training programs, and lobbying projects, etc. And another trend - the emergence of new sources for financing factoring. If previously it was mostly traditional loans, but now many players began to use a wide range of other financial instruments. Increases and investor interest in factoring. A year ago, both Russian and foreign investors are looking at factoring as some exotic object of investment, but now they show it more and more awareness and interest. What are the main events of six months for your factoring company? The main event for our company - the issue of bonds, which analysts have estimated as the first public deal of its kind in the factoring market in Russia. The deal has been implemented quite successfully, although the training took a lot of time: we have started preparing for the deal in September 2007. Were involved in highly organizers issue, and also to use the resources of the Investment Bank "TRUST". Paper received high ratings, and the yield on it, I think, quite acceptable for the factoring market. As a result, bonds were successfully placed. In the first half of 2008, we restructured our business. First and foremost, this concerns strengthening the role of the regions. Regional offices have been given additional powers which they had previously lacked. We have strengthened our presence in regions without increasing the number of points of sales, but increasing the number of managers, focusing on the improvement of regulations and business processes, provide additional powers to the regions to form a registry to increase the role of heads of regional divisions of the company, that is strengthened regional channel involvement. In central Moscow office of strategic decisions, and to finance and control, and work with accounts receivable held in the regions. Also worth noting is a new level of our call-center, which not only provides information support, but also conducts ongoing everyday communication, including product sales, with clients and debtors in all regions. The company has been seriously revised methodology for risk management. We are carefully working to assess the potential risk customers, it also affected the security services, and our information databases, and the process of gathering information of any kind in the region. Which allowed the company to re-evaluate its customer base, make it even better and to preserve profitability. In this case, the rate of growth of our business in the first half of 2008, we believe, quite acceptable for a company that has already taken a definite place in the market. What factors have hindered the work factors in the first half of 2008? Negatively on the development of business affected dumping policy of the new factors. I believe that for the market as a whole dumping some of its members does a disservice. If the company offers a full range of factoring products, not just finances secured receivables, dumping inappropriate. For example, creating and improving the efficiency of call-center costs money, and that's part of the management of accounts receivable. The liquidity crisis in the first half is not very much felt in the factoring market. Literate factoring companies certainly change their approach to risk, tighten the requirements for clients to become more choosy in the politics of funding companies will not be too hard to increase the limits for customers, such as, for example, in 2007, when the company could increase its turnover by 4-5 times. Whether the increased prices for factoring services to clients IFC "TRUST"? Not yet. We attract resources at a fixed rate, so if nothing changes, I see no reason to raise prices. Does redistribution client bases between the factors? That in current circumstances, can increase customer loyalty? Global redistribution of client bases were not, in any case, we do in their regular customer base have not noticed, as usual, someone comes, someone goes out. In the company always came a number of clients who have previously been funded from other factors. And to enhance customer loyalty, as well as at any time, it is important to factor performance of its obligations, it is this and is defined by loyalty to factoring. Awareness of the client (in a good, satisfying the requirements of the factor) that he could at any time to obtain financing and the full range of factoring products are now even more important than the price difference in the cost of services provided by different factors. If a client sees that the factor performs its obligations in full and at the proper level, it is unlikely to switch to another service in the factoring company. Public company adheres to the principles in regional development? Regional Network for factoring - it is the main factor of development. We are 60 representative offices in almost all major cities of Russia, and that says a lot. When you select a region, we focus on their industry preferences, in some industries the company fundamentally does not work. And interesting for our business sector is usually unevenly distributed throughout Russia, and therefore in the region where they are present, we are trying to strengthen their positions. Besides, there are certain regions where we do not consider it expedient to work due to poor relations for the company "risk - return profile. Unfortunately, so far in terms of regional business as he was, and remains opaque, and change for the better is not happening. In the construction of a regional development strategy the company always takes into account the activities of competitors: if the region is active in our direct competitors, we have to open their sales offices in the same place is not interesting. In general, the regional network of IFC "TRUST" has already been formed, and a sharp increase in the number of branches is not planned, though, of course, there will be local changes, for example, in regions with low efficiency of the company will redeploy its influence in a more interesting business areas. As far as factoring network intersects with the network bank "TRUST"? The cities of the presence of the intersection by about 95%. It should be noted that in most cases, we are opening separate from the bank offices to serve clients of factoring. This is due to a number of different reasons, including, for example, to avoid potential conflict of interest between factoring and credit management. But on the other hand, we cooperate closely with the bank: we have a unified security service of "Trust", a single call-center, we use a common database. If for us is the obvious fact that the customer obtain the classical banking services, may be useful factoring, we offer it to the client, and, conversely, the clients of factoring in case of need offers other financial products group. Are you planning to use any new sources of funding in the second half? Back in late 2007, we wondered about the issue of ruble bonds, but in current conditions in the stock market is not feasible. No plans does your company take part in operations on purchase and sale of the factoring portfolio? We do not plan to participate in such transactions. Once our company has acquired the factoring portfolio at a small bank, consisting of a dozen very good customers with whom we are still working. Does the IFC "TRUST" with insurance companies on insurance transactions on factoring the risk of default of the debtor? No, I do not know a lot of examples in our market Factors cooperation with insurers in terms of insurance against the risk of default. In fact, we provide our clients with protection against this risk by leaving it out for yourself. If this risk transfer insurance company, we have significantly reduced profitability of business, as well as payment for bearing the financial risk for insurers is very high. We have an agreement with RCS, but it refers to activities to attract customers, working with client databases. Insurance companies take the initiative in cooperation with the factors? Previously exhibited, but now no. Perhaps the insurance of default of the debtor was interested suppliers at a time when there was no active factoring business, but now cover the payment risk factors. What factors determine the effectiveness of risk management systems? Such factors are not many. This, above all, staff qualifications, working with risk assessment. Secondly, it has proven over the years a system of risk management and risk assessment techniques. Risk Management we are constantly finalizing the terms of adjustments of various factors, improve decision-making procedures. In the structure of our company are marked factoring Committee, the risks of operative management committee, as well as the various bodies involved in work with debtors. Work with the credit risk we carry on a specific set of credit rules, this is something similar to the scoring model for factoring and Risk Committee shall decide on its modernization. It is obvious that the organization of risk management requires a database of customers and accounts receivable, as well as related software. Thus, the effectiveness of risk management system is defined by: qualified personnel, a system of decision-making on risks, the availability of relevant databases and modernized IT-security. What factors determine the effectiveness of IT-systems to a factoring company? Effective IT-system must be able to quickly adapt to changes in the business. You need a client to access it. Any client, or even better, and every debtor should be able to constantly monitor the situation in the mode of on-line: to see which operations have been conducted, in what terms, what the commission has been written off, etc. IT-system should be able to work with very large amounts of information. When they say that factoring in the most expensive - software, telling the truth. In general, I would like to add that today factoring place! There is no going back. If before we even thought on the subject: whether the demand for factoring in Russia, now this is no doubt. The market is growing and growing at a good pace. In Russia there are suitable conditions for the development of factoring: Russian companies like to sell in installments, with the debtors do not always pay on time, which is favorable to factoring companies in terms of yield of the latter. But today, the existing factor not to be engaged in non-factoring, ie, dumping surrogate. And of course, a positive step for the market would be to reduce the level of concentration.