While bank lending overall has fallen steadily over the past few years, the factoring business has posted annual growth of at least 20 percent since the 1997 crisis, according to Puntrika Baingem, the managing director of Thai Farmers Heller Factoring Co.
As commercial banks have tightened lending procedures and credit lines for customers, factoring has emerged as a strong alternative for companies seeking to manage liquidity and secure short-term financing.
"The turnover in factoring overall, just counting the more than 10 companies which are members of Factor Chain International, already stands around 50 billion baht per year," Mrs Puntrika said.
"If we count the many smaller firms who also provide factoring services, annual turnover in Thailand is likely to be around 100 billion baht."
Last year, Thai Farmers Heller, a subsidiary of Thai Farmers Bank, had factoring volume of 8.4 billion baht, up from 7.3 billion the previous year.
