A growing market for receivables finance platforms has created a whole ecosystem with investors, insurers, service providers and other players being involved. It has deployed various structures and technology solutions. In this paper, we look at drivers for growth, types of risk involved, effectiveness of risk mitigation tools such as insurance, and the role of technology solutions.
We particularly focus on risk aspects, including credit risk at both individual and portfolio basis, fraud, supplier performance and servicer risks, and how these need to be managed to avoid major failures.
A review by Igor Zaks, President, Tenzor