Following the the extensive response from the FCI members globally, we are pleased to release the final world factoring statistic. This 2021 report indicates that the Factoring and Receivables Finance Industry volume witnessed a significant growth of +13.5% in 2021 after the devastating impact from COVID-19 in 2020, which as you may recall reported a staggering decline of -6.5% in volume, the single worst year reported by FCI since it began reporting the global statistics in the late 1970s. Compared with the previous year’s €2,724 billion, the 2021 estimated volume of €3,093 billion represents the first double digit increase reported in over two decades. In fact, 2021 marks the end of a challenging period where businesses were interrupted due to the severity of the virus. Each region was affected slightly differently and the so called ‘return to normal’ has been different, with some showing more progress than others.
Europe, the largest contributor to the industry representing around 69% of global volume with 2,118 billion euro has shown an overall increase of close to 14.8%. From a factoring volume perspective, top five players include France (+12.8%), United Kingdom (+20.4%), Germany (+12.5%), Italy (+10.0%) and Spain (+9.4%). Some markets exceeded expectations, resulting in astounding growth rates like Poland (+25.6%), Romania (+19.3%), Russia (+62.4%), Bulgaria (54.5%) and Czech Republic (32.0%). Turkey, another significant player in Europe showed in 2021, for two consecutive years another decline, from 18.9 billion in 2020 to 15.9 billion in 2021, representing a drop of -15.9%. However, Turkey suffered from a significant depreciation in its currency last year, and hence the translated figures into Euros certainly painted a much grimmer picture.
The Asia Pacific region represents approximately 24% of global volume with €751 billion, which experienced an increase of +7.7% over 2020. In 2021, the volume of €562 billion relates to the Greater China region, including Mainland China (+8.4%), Hong Kong (-3.8%) and Taiwan (+15.3%). Japan displayed a growth rate of +14.5% reaching €58.6 billion euro. India experienced the most explosive growth rate of +141% with €8.6 billion euro.
The Americas, which was the hardest hit region globally in 2020, showed a remarkable recovery in 2021. The regional volume, which represents 6% share of the total world factoring volume with an overall figure of €183 billion experienced a double digit increase of approximately +22% after a fall in 2020 of -30%.
South and Central America, with close to 3% share of the total world factoring volume with 86 billion euro witnessed a slight increase of +3%. The top three players of this region are Chile (+8.9%), Brazil (+11.4%), and Mexico (18.3%).
North America, with its 3% share of the total world factoring volume with 97 billion euro, displayed a marked improvement increasing +45.7% compared to 2020. That compares with a reduction in volume in 2020 of -23%. The US retail sector in 2020 was severly impacted by the pandemic with numerous bankruptcies reported that year, however 2021 witnessed a significant turn around in part due to the strong support by the US government stimulus programs.
Africa represents 1% share of the total world factoring volume. The total market adds up to a total of 32 billion euro indicating also a significant growth rate of 28% compared to 2020. South Africa, the largest market accounting for over 80% of the entire volume on the continent witnessed a staggering increase of 30%, certainly an indication that the African market looks ready to return to its strong growth trajectory into the foreseeable future.
Considering the continuation of a challenging global environment stemming from the pandemic, the FCI market survey results demonstrated the strength and resilience of our industry in 2021, with a 13.5% growth rate over 2020. As we witnessed this significant turnaround in global factoring volume, we seem to be returning to a state of normalcy. With the expectation of an increase in credit risk in the second half 2022 in part due to the withdrawal of state support, the increase in inflation and interest rates, the conflict in Eastern Europe, and the continued impact of the pandemic in China, we have some concerns of the effects it could have on our industry. However, the factoring community normally excels during times of crisis and even though this period continues to be challenging, we remain bullish and expect the industry to continue its positive trajectory for the foreseeable future.