Al Mal Newspaper
To Support Services in Egypt
FIM BANK Enters Into Partnerships With Banks in India and Russia to Establish Two Factoring Companies
FIM BANK Malta, one of the largest European banks in the field of promoting trade, has entered into a partnership with “Transcapital Bank” in Russia for the purpose of establishing FactorRus company to provide factoring services for large Russian companies and for small and medium enterprises. The company aims at proving finance to such businesses in the form of advance payments that equal 90% of the value of the collected invoices. FactorRus company also aims at providing finance to companies and institutions in order to fill the gap of finding the finance required to cover the short term dues of the banks in the Russian economy as they started to adopt very strict rules in granting lines of credit after the start up of the global financial crisis.
In the same context FIM BANK has signed a similar agreement in India with the PUNJAB National Bank as it is one of the leading commercial banks in the Indian economy. This agreement is signed in preparation for establishing a new factoring company where FIM BANK will have a governing share of 49%. The company aims at funding commercial operations and supporting the relevant factoring activity.
It is expected that the new partnerships of FIM BANK will support the factoring activity in Egypt and facilitate trade between Egypt, Russia and India as this bank is one of the main shareholders in the Egypt Factors Company. Egypt Factors is the first factoring company established in Egypt in partnership between FIM Bank and the Commercial International Bank with a share of 40% for each of them and 20% for the International Finance Corporation.
Mr. Ahmed Shaheen, the General Manager of Egypt Factors has declared to Al MAL that the new partnerships of FIM BANK are considered new overseas branches for Egypt Factors Company and this will facilitate providing factoring services to Egyptian importers and exporters from these countries and consequently this will be positively reflected on developing financial transactions between Egypt and these countries. Mr. Shaheen expects that the volume of factoring transactions will be doubled in the coming year.
Mr. Shaheen declared that export factoring is one of the most significant products that will benefit from the new companies as it meets the demands of Egyptian importers, guarantees payment of export revenue and provides the immediate liquidity required for continuous export activity. Factoring companies provides finance in the form of advance payments up to 90% of the value of the invoice and facilitates the provision of information about clients. In addition, Egypt Factors may seek the assistance of FIM BANK companies to facilitate the tasks of collecting invoices from the export company clients.
Mr. Shaheen referred to the benefits of import factoring services for Egyptian importers specially that a major part of Egyptian imports comes from India and China as they provide a finance program for the supplier and offer factoring for their purchases.
On the other hand, Ms. Margret Loutis the President of FIM BANK declared that the recent partnerships signed by the bank with Russia and India are considered an important step in the bank’s expansion activities for the world wide growth of factoring activity. Ms. Loutis expects that the new companies will be able to grow rapidly in order or play a positive role in the market.