Canbank Factors achieved a turnover of Rs. 1,000 Crores in 1999-2000 and expect growth of 25-30% in the coming financial year. The domestic factoring market in India is in its infancy and thus the growth potential is enormous. One of the key obstacles to faster growth at the moment is the reluctance on the part of larger corporates to assign the collection of receivables to the factor. Another problem is that there is only full-recourse factoring on offer. In the case of export receivables, financing is of a non-recourse nature, as the factor in India has an arrangement with a correspondent factor in the buyer's country who guarantees the risk involved. Mr. R. Ranaganathan, MD of Canbank Factors expects factoring services to increase their market share dramatically once proper factoring laws are put into place. The charges levvied by factoring companies range between 13.5 % and 18.5%.
