Kolkata, Jul 3 (UNI) SBI Factors, a leading factoring company in the country and subsidiary of State Bank of India, is expecting a Rs 50 crore business in the first year of its operation from this metro, company Managing Director and CEO D S Das today said.
Earlier, SBI's Chief General Manager, Bengal circle, J K Sinha inaugurated the Kolkata branch of SBI Factors, first in the city and 11th in India, ushering a new business opportunity for importers and exporters, especially SMEs in the eastern region.
Factoring is a "continuing arrangement" between a financial institution (the factor) and a business concern (the client) selling goods or services to trade customers (the customer) whereby the factor purchases the client's accounts receivables/book debts either with or without recourse to the client and in relation there to control the credit extended to the customers and administers the sales ledger.
The cliants are basically from SME (small and medium enterprise), Mr Das said.
SBI Factors, since its launch in 1991, has emerged as a major factoring business in India with an asset base of Rs 1908 crores as on March 31 last. It was the first factoring company to be set up in India.
SBI Factors was expecting a business of Rs 2000 by this fiscal as the market was emerging fast, although at a snail's pace compared to developed nations, Mr Das said.
Quoting figures, he said last year the factoring companies made a business about 1.3 trillion Euros around the world, comapred to India's share of only 5 billion Euro, about .6 (point six) per cent of the country's GDP.
''But a smaller country like Taiwan had its share of 44 billion Euros, about 15 per cent of its GDP,'' said Mr Das, adding that India was also catching up with this business.
Factoring means Instant Cash Factoring and is a collection and finance service designed to improve your cash flow, turning your credit sales invoices into ready cash, he explained.
Currently, it has four products: domestic (with recourse), domestic (without recourse), purchase bill and domestic factoring of bills draw under LC or bank guarantee.
The opening of SBI factors in the city fructified after almost two decades of planning as it was proposed to open in the early 90s.
Mr Das, however, could not elaborate on the cause of the delay, saying "we opened today".
UNI PC PL AB 1441