India Factoring (India Factoring & Finance Solutions), a joint venture between Punjab National Bank (PNB) and Malta based FIMBank, Italy based Banca IFIS and Blend Financial Services of Mumbai, is riding high on the passage of the Factoring Bill during the winter session of the parliament.

The company expects many new players to join the fray and the overall factoring business in the country to grow by 30-35 per cent per annum over the next two-three years. Its own business is expected to grow by over 50 per cent per annum during this period, taking the first mover’s advantage.

“Now that a consolidated legal framework being in place, it will lead to the growth of factoring companies in the Indian market. The proposed legislation will, for the first time, regulate the factoring business in India, besides enabling the factoring companies to obtain legal remedy and claim their rights on the bills (invoices) factored by them in a more efficient manner,” Sudeb Sarbadhikary, chief executive officer (CEO), India Factoring, told Financial Chronicle. The company, which had finished its first year of operation with close to Rs 270 crore of assets, has already crossed Rs 700 crore mark.

The company is also gearing up to meet the growth challenges. At present India Factoring have offices in Delhi, Mumbai, Chennai, Bangalore, Hyderabad, Ahmedabad and Kolkata. It is already in the process of setting up offices in larger tier-II cities across the country. That’s not all. The company, which at present has a headcount of 80, will have more than 200 staff on its roll by the next year, said Sarbadhikary.

Factoring services, which according to Factors Chain International, a global association of Factoring companies worldwide, has experienced a growth rate of 100 per cent across the world in the last five years, benefits the small entrepreneurs not only by providing much needed liquidity for their business (which is not linked to balance sheet) but also by way of professional debt administration and collection services. This enables SMEs to control and use their receivables more efficiently.

India Factoring, one of the leading, independent provider of specialized trade finance products in the country, has recently got the AD (authorized dealer) licence from RBI to kick off its overseas operations. “Getting the AD Licence from RBI is the first step towards starting off our overseas operations. We will now have to establish our global network. We have recently got membership of International Factors Group (IFG) and are now trying for Factors Chain International’s membership. These should take another 7-8 months before we can actually initiate our overseas activities,” said Sarbadhikary.