India Factoring (India Factoring & Finance Solutions Pvt Ltd), a joint venture of the state-owned Punjab National Bank (PNB), Malta-based FIM Bank Group, Italy-based Banca IFIS, and Blend Financial Services, Mumbai, has set up its regional office in Pune.
With this, it aims to provide factoring services to small and medium enterprises, and small-scale industries in Pune, Nashik, Nagpur, Aurangabad, Kolhapur, Solapur, Satara Nagar, Sangli, and Belgaum.
At present, India Factoring is providing financial solutions to more than 250 SMEs and SSIs from its seven offices based in Delhi, Mumbai, Chennai, Bangalore, Kolkata, Ahmedabad and Hyderabad.
Sudeb Sarbadhikary, CEO, India Factoring, said: “With its changing SMEs and SSIs environment, Maharashtra has a huge potential to grow SMEs and small-scale industries and there is a need for factoring and other trade finance services to support them.”
In India, SMEs generate the second largest employment opportunity after agriculture and contributes around 40 per cent of the country’s export.
Factoring is a financial transaction where a business sells its accounts receivable to a third party called ‘factor', which undertakes the activity of financing the receivables, administrating the debt and collection of the same.
In developed markets, factors also provide bad debt protection and it is expected that as the markets evolve in India and proper legislations are enacted, similar services will also be available for Indian consumers.
Factoring services benefits the small entrepreneurs not only by providing the much needed liquidity for their business which is not linked to the balance-sheet but also by way of professional debt administration and collection services. This enables SMEs to control and use their receivables more efficiently.