Invoice Factoring Market Size Worth $6,004.70 Billion by 2032 - Rising Fintech Solution Adoption Rate among SMEs

The global invoice factoring market is anticipated to grow at a CAGR of 8.16% from 2023 to 2032. The rise in demand for alternate forms of finance for micro, small and medium-sized businesses contribute to the market expansion.

Newark, May 25, 2023 (GLOBE NEWSWIRE) -- The Brainy Insights estimates that the USD 2,740.47 billion in 2022 invoice factoring market will reach USD 6,004.70 billion by 2032. It is anticipated that the widespread adoption of machine learning (ML), natural language processing (NLP), and artificial intelligence (AI) will lead to profitable expansion opportunities for factoring during the projected period. The COVID-19 outbreak brought a more collaborative approach, with banks and Supply Chain Finance (SCFs) working together to benefit the client ecosystems.

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Key Insight of the Invoice Factoring Market

Asia-Pacific is anticipated to expand at the highest CAGR of 11.37% over the projection period.

Asia-Pacific is expected to grow at the highest CAGR of 11.37% over the forecast period. It is because economies like India and those of other Southeast Asian nations have seen manufacturing sectors grow. Their economies are fast transitioning from agricultural to manufacturing and export-oriented economies, which has promoted the expansion of invoice factoring in the area. The Asia Pacific region is also home to a significant number of rising economies, including China, Thailand, India, and the Philippines, which are attracting investments from developed markets that are saturated and looking for new business prospects in the area. Small and medium-sized firms (SMEs), which make up more than half of all businesses in Asia Pacific, frequently seek financial assistance to maintain the smooth functioning of their operations.

The international segment is expected to register the highest CAGR of 10.49% over the projected period in the invoice factoring market.

The international segment is anticipated to grow at the highest CAGR of 10.49% in the invoice factoring market. Regardless of the size or the sector company serve, international factoring services are a must for companies doing business internationally. Increased open account trading has encouraged this market segment to expand further, and importers in industrialised nations are considering factoring as a viable alternative to traditional forms of trade financing. In addition, the increased awareness of global trade and the relocation of production facilities, particularly following the COVID-19 epidemic in China, to other economies like Vietnam, Mexico, and the Philippines are promoting the expansion of this segment.

Over the projected period, the non-recourse segment is expected to register the highest CAGR of 10.75% in the invoice factoring market.

Over the forecasted period, the non-recourse segment is anticipated to grow at the highest CAGR of 10.75% in the invoice factoring market. This is because non-recourse factoring services are used more frequently in developing countries. The non-recourse factoring provides firms with total credit security, the primary factor promoting growth. Businesses with a broad customer base may seek to offload their accounts receivable to clean up their balance sheet; in this instance, non-recourse factoring is a viable choice. Since the factoring company is responsible for any bad debt in the case of non-recourse factoring, they have stricter credit standards. Truckers at the bottom of the food chain employ non-recourse factoring frequently because they desire financial stability when getting paid for cargo.

The non-banking financial institutions’ segment is expected to register the highest CAGR of 10.99% over the projected period in the invoice factoring market.

The non-banking financial institutions’ segment is anticipated to grow at the highest CAGR of 10.99% in the invoice factoring market. The flexibility and openness that non-banking financial companies provide their customers can be associated with the development. To compete with banks, non-banking financial institutions are progressively implementing cutting-edge technology. For instance, RTS Finance, one of the best invoice factoring businesses for trucking, offers mobile and online browser apps for more significant platform interaction. Truckers may follow the transaction's progress and benefit from several advantages, including fuel card savings and the absence of any unstated fees for automatic clearing or invoice submission.

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Market Dynamics

Driver: Rising fintech solution adoption rate among SMEs

The adoption of fintech has been accelerated by a rise in public knowledge about developments in financial technology in areas including payments and money transfers, financial planning and budgeting, borrowing, saving, and investing, as well as insurance. Adoption rates for China and India were 87% and 58%, and 50%, 67%, 67%, 71%, and 46%, respectively, for Australia, Canada, Hong Kong, Singapore, the United Kingdom, and the United States. As an example, the global adoption of fintech has been rising gradually. Most companies offering payment services support small business owners' faith in their ability to compete in the market. Because most banks are unwilling to issue multiple paychecks, fintech solution companies provide an automated option. Fintech offers cost-effective bulk payment services. This increases banks' or third-party insurers' return on investments (RoI) by enabling SMEs to access fintech companies. The primary legitimacy and safety solutions offered by Fintech companies keep an eye on the SMEs transaction process. This creates a situation where everyone benefits from invoice factoring, including major banks and SMEs.

Opportunity: Invoice factoring using blockchain

The banking industry has seen a considerable transformation due to information technology. Due to innovative financial technologies, the transaction procedure in the factoring company has been automated. The development of automated solutions has also contributed to expanding the financial sector by enhancing planning and security. The adoption of crypto-solutions has improved transaction accuracy and secured sensitive data for all parties (including suppliers and invoice factoring buyers), reducing the likelihood of financial fraud. The invoice factoring market can improve financial transactions through a centralised and encrypted method by integrating smart contracts into the blockchain. The open blockchain systems include R3CORDA, Hyperledger, NEO, and Ethereum. Ethereum is the most appreciated of these platforms. The platform enables a smart contract to be decentralised, stored, and executed, enabling local hashing. The public disclosure of the processed data assists in boosting network security.

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Some of the major players operating in the invoice factoring market are:

• American Express Company
• Lloyds Bank
• Sonovate
• Velotrade
• Adobe
• Intuit Inc.
• Waddle
• Porter Capital
• Barclays Bank UK PLC

Key Segments cover in the market:

By Category:

• International
• Domestic

By Type:

• Non-Recourse
• Recourse

By Financial Institution:

• Non-Banking Financial Institutions
• Banks

By Region

• North America (U.S., Canada, Mexico)
• Europe (Germany, France, U.K., Italy, Spain, Rest of Europe)
• Asia-Pacific (China, Japan, India, Rest of APAC)
• South America (Brazil and the Rest of South America)
• The Middle East and Africa (UAE, South Africa, Rest of MEA)

About the report:

The market is analyzed based on value (USD Billion). All the segments have been analyzed worldwide, regional, and country basis. The study includes the analysis of more than 30 countries for each part. The report analyzes driving factors, opportunities, restraints, and challenges for gaining critical insight into the market. The study includes porter's five forces model, attractiveness analysis, product analysis, supply, and demand analysis, competitor position grid analysis, distribution, and marketing channels analysis.

About The Brainy Insights:

The Brainy Insights is a market research company, aimed at providing actionable insights through data analytics to companies to improve their business acumen. We have a robust forecasting and estimation model to meet the clients' objectives of high-quality output within a short span of time. We provide both customized (clients' specific) and syndicate reports. Our repository of syndicate reports is diverse across all the categories and sub-categories across domains. Our customized solutions are tailored to meet the clients' requirement whether they are looking to expand or planning to launch a new product in the global market.

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