Fiorito en la Prensa

Buenos Aires Herald - 21/03/03 - Company News
Credit crunch fuel factoring growth

By Peter Jonhson, Herald Staff

An old financial service, started up over 100 years ago and used extensively by British companies and US companies predominantly on the East coast is beginning to find its way into the Argentine financial system.

The lack of active credit lines and the prohibitive interest rates being charged by banks has provided a fertile ground for those companies as companies seek alternate methods of financing in a market where little is available.
The service, factoring, is a complete financial package that combines credit protection, accounts receivable bookkeeping, and collection services.

In simple terms, it is an agreement between the factor and a seller. Under the agreement, the factor purchases the seller’s accounts receivable, normally without recourse, and assumes the responsibility for the debtor’s financial ability to pay.
In Argentina the service has been provided on a limited basis by some of the leading banks, but has never developed to the extent that it has in Brazil or Chile. Yet a few new players are beginning to appear on the scene.

With a finger on the pulse of local banking activity and extensive experience accumulated from the days that he used to head Banco Quilmes, Ricardo Pedro Fiorito has branched out into this relatively new activity for Argentina.

Although the political uncertainty currently permeates all business activity and there are few signs of what economic policies Argentina will adopt in the future, Fiorito has begun to offer these services and has teamed up with Angel Perversi, formerly of Bunge & Born, and who now heads the Global Business Opportunities consultancy, to offer their respective customers a whole range of solutions in this field.

Besides factoring, the joint venture will provide a range of consultancy services, including debt restructuring, foreign trade, mergers and acquisitions, company restructuring, among others. Fiorito commented that the firm had recently signed its first debt restructuring contract.

Commenting about factoring in Argentina in general, Fiorito stated that there are still no statistics on this activity and efforts to set up some form of chamber is still in its early stages. He also stated that the lack of any form of regulatory framework and the current cheque tax — that factors have to pay twice — are some of the issues affecting the development of this activity.

Speaking of the future, he was hopeful that whoever wins the forthcoming elections will make monetary stability one of their top priorities.

Worldwide, domestic factoring stands now at a volume of some 670 billion euro, while cross-border factoring volume is close to 50 billion euro, figures which are more than double from five years ago.
The largest market continues to be Europe, which represents 65% of world volumes, followed by the Americas with 22% and the Asia-Pacific area with 12% of world volumes.

Strong growth is being noted in particular in emerging economies in Central Europe with Poland, Czech Republic, the Baltic States, Hungary and Slovakia as prime examples.

Even stronger growth was seen in some of the Asian countries, with volumes up in India by 50% and China, showing an impressive 600 percent growth.

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