With a capital of 15 Million Dollars
The First Factoring Company in Egypt launches its business with 3 services
Sherine Mohamed Wrote:
Egypt Factors for factoring has recently obtained its license to render the factoring services.
Bernhard Arnebold the company’s managing director has mentioned that the company is considered the first factoring company in the Egyptian market with an issued capital of 5 million dollars and authorized capital of 15 million dollars, indicating that there is an intention to increase the capital in the next stage with the expansion in the company’s business in the market. Egypt Factors is a non banking financial institute shared amongst the Commercial International Bank with 40% and FIMBank which is a Maltese Bank working in the trade finance business like LCs and collection with 40%, and the International Finance Corporation a subsidiary of the World Bank with 20%
Ahmed Shaheen the general manager of Egypt factors pointed out that there are 3 types of factoring: The first is export factoring; the second is import, and the third is domestic factoring. As for the first type related to exports. Shaheen mentioned that the exporter sends the shipment gets the proceeds after 90 days and here he faces the risk of non payment. In the meantime he needs liquidity and here comes the role of the company to provide the liquidity needed by the exporter. Meanwhile, it collects from the importers abroad through correspondents all around the world, and before the exporter ships the goods the company study the customers and their ability to honor their obligations.
As for Import Factoring Shaheen mentioned that the company guarantee the importer who can get the merchandise and finance from abroad while it guarantee his payments
As for Domestic Factoring, the company provides liquidity to the companies through purchasing their receivables due on their buyers which gives them liquidity and flexibility in the market to grant credit 20 or 90 days.
Shaheen added that the company is authorized to practice all the three factoring types and has started with export and import factoring and will be followed by domestic factoring.
As for this business in Egypt Shaheen criticized the lack of awareness in the market of the factoring business and its role in supporting the exporter or importer, indicating that the company has started to educate market through holding a conference for the free zone companies in Cairo, which was attended by representatives from 100 companies who got acquainted with factoring and its benefits. Other conferences are under preparation.
About Egypt Factors willingness to compete with The Egyptian Export Guarantee Company that launched recently the factoring services and increased its capital to expand in that service, Shaheen emphasized that The Egyptian Export Guarantee company’s role in focused on guaranteeing exports and insuring the companies against the risk of non payment of the importer or in case turbulences occurs in the importing country. It has started introducing factoring services besides its core business.
As for Egypt Factors it is specialized in the factoring business with all its types either to the exporter, importer, or the domestic. It also provides adequate liquidity to its customers to commence their business, indicating that the company is a member in the international organization for factoring companies (Factors Chain International) working around the world in order to receive the correspondents services, for example in France the company could co-operate with 10 companies in the same filed being members of FCI