• Investment World
• eWorld
• Brand Line
• Mentor
• Life
• Canvas
• Praxis
• Urban Pulse
• Brand Quest
• The New Manager

Stocks

• Quotes
• SE Diary
• Scoreboard
• Open-End Mutual Fund

Cross Currency

• Rates
  
  

Shipping

• Ports
  
  

Archives

• Yesterday
• Datewise
• Resources
• In Focus
• In Depth

Group Sites

• The Hindu
• Business Line
• Sportstar
• Frontline
• The Hindu eBooks
• The Hindu Images

Our Bureau

The factoring charges for a local trader would vary between 9 and 11 per cent, inclusive of interest cost, credit insurance and collection charges and also depend on customer's profile.

Mumbai , Aug. 23

HSBC has launched factoring services for small and medium-sized enterprises (SMEs). The bank will offer SMEs with a minimum turnover of Rs 5 crore and a maximum of Rs 50 crore, a range of factoring products that support both international and domestic trade.

Factoring addresses the need of exporters or sellers to avail themselves of pre-finance on receivables for their working capital requirements.

Mr Bhriguraj Singh, Senior Vice-President and Head Factoring, HSBC, said that the key constraint for small companies in India was securing and managing working capital.

Factoring was significant for exporters because they are required to extend liberal open account terms of sales to their customers and also since international buyers are unwilling to enter letter of credit based transactions due to the additional monetary and administrative costs involved, he said.

HSBC has been offering factoring services to corporate customers for the past five years.

The bank has 250-300 corporate customers and the business currently contributes 5-10 per cent of the total lending.

HSBC has so far roped in about 15-20 customers from the SME segment.

Mr Subir Mehra, Head-Commercial Banking, HSBC, said that globally, factoring had default rates lower than that of routine lending. He also said that internationally, the bulk of factoring services was offered to SMEs.

The factoring charges for a local trader would vary between 9 per cent and11 per cent, inclusive of interest cost, credit insurance and collection charges. "The charges would vary depending on the risk profile of the customer and the buyer," said Mr Singh.

In terms of its total lending business, HSBC currently has around 35-40,000 customers from the SME segment.

More Stories on : Foreign Banks | SSI | Financial Services

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Internet-based forex service allowed

Copyright © 2006, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line