factoring in egypt

Factoring in Egypt

Benefits to Egyptian businesses

Cairo13-Jan-2010

AGENDA

International Factoring Promotion Conference, Cairo, 13-Jan-2010

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1. What is factoring?

2. Factoring statistics for Egypt

3. Factoring packages available in Egypt

4. Factoring versus other products

5. Conclusion

AGENDA

International Factoring Promotion Conference, Cairo, 13-Jan-2010

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1. What is factoring?

2. Factoring statistics for Egypt

3. Factoring packages available in Egypt

4. Factoring versus other products

5. Conclusion

WHAT IS FACTORING?

International Factoring Promotion Conference, Cairo, 13-Jan-2010

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Package of

financial services

whereby you

assign* invoices to

the FACTOR for the

benefit of…* assignment notification might be required

Financing

DebtCollection

Risk Protection

WHEN MAY FACTORING APPLY?

International Factoring Promotion Conference, Cairo, 13-Jan-2010

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Commercial invoice

Sales on credit [contractual relationship; up to 180 days credit terms]

Continuous relationship

Clear/Clean performance [no sale or return (consignment) no counter sales, no performance claims]

Clear sales title & enforceable receivables [no legal constraints, clear ownership of the goods]

Spread of buyers [“not all eggs in one basket”]

AGENDA

International Factoring Promotion Conference, Cairo, 13-Jan-2010

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1. What is factoring?

2. Factoring statistics for Egypt

3. Factoring packages available in Egypt

4. Factoring versus other products

5. Conclusion

FACTORING STATISTICS

International Factoring Promotion Conference, Cairo, 13-Jan-2010

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REQUIREMENTS FOR FQACTORNG COMPANIES

International Factoring Promotion Conference, Cairo, 13-Jan-2010

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Minimum capital of EGP 10Mio

Factoring should be the sole activity or should maintain separate books for the factoring activity

One of the shareholders should be a financial institution

Managing Director or Executive Officer should hold an university degree with an experience of more than 10 years in the financial or banking fields

AGENDA

International Factoring Promotion Conference, Cairo, 13-Jan-2010

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1. What is factoring?

2. Factoring statistics for Egypt

3. Factoring packages available in Egypt

4. Factoring versus other products

5. Conclusion

WHERE FACTORING HELPS YOU?

International Factoring Promotion Conference, Cairo, 13-Jan-2010

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CLIENTBuyer / Seller

DomesticPurchase

ForeignPurchase

DomesticSales

ForeignSales

Purchase Factoring

Receivables Factoring

FACTOR

Complete Trade Finance Solutions

EXPORT FACTORING

International Factoring Promotion Conference, Cairo, 13-Jan-2010

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DOMESTIC FACTORING

International Factoring Promotion Conference, Cairo, 13-Jan-2010

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PURCHASE FACTORING

International Factoring Promotion Conference, Cairo, 13-Jan-2010

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AGENDA

International Factoring Promotion Conference, Cairo, 13-Jan-2010

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1. What is factoring?

2. Factoring statistics for Egypt

3. Factoring packages available in Egypt

4. Factoring versus other products

5. Conclusion

FACTORING vs. OTHER PRODUCTS

International Factoring Promotion Conference, Cairo, 13-Jan-2010

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FACTORING

Post shipment

Performance & DebtorPayment Risk

Cash flow/Portfolio/Buyer driven

Value proposition for all clients (including SME’s)

Liquidity linked to growth

Value added - risk management

Without/Limited (performance) recourse

BANK FINANCE

Pre & Post shipment

Financial Risk

Security/Collateral driven

Price effective for good Balance Sheet

Liquidity linked to Security

Mainly financing

Always with recourse

FACTORING vs. OTHER PRODUCTS

International Factoring Promotion Conference, Cairo, 13-Jan-2010

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FACTORING [FCI]

Assignment required

Risk cover up to 100%

No down payment; charges linked to the actual turnover

No maximum annual claims

Claim payment by maximum 120 days from due date

Financing available upon assignment

Commercial collection included

CREDIT INSURANCE

No assignment required

Risk cover up to 90%

Advance premiums; charges linked to forecasted turnover

Maximum annual claims

Claim payment by maximum 180 days from due date

No financing available

No commercial collection available

AGENDA

International Factoring Promotion Conference, Cairo, 13-Jan-2010

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1. What is factoring?

2. Factoring statistics for Egypt

3. Factoring packages available in Egypt

4. Factoring versus other products

5. Conclusion

CONCLUSION

International Factoring Promotion Conference, Cairo, 13-Jan-2010

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CONCLUSION

We cannot changeWe cannot change

the direction of the windthe direction of the wind,,

however we can adjusthowever we can adjust

our sailsour sails!!

YOUR PARTNERS IN EGYPT

Export Credit Guarantee Co.

of Egypt (ECGE) Web:

www.ecgegypt.net E-mail:

ecge@ecgegypt.net Phone:

02 226 367 40 Main shareholder:

Export Development Bank of Egypt; National Investment Bank

EGYPT FACTORSS.A.E.

Web:www.egyptfactors.com

E-mail:info@egyptfactors.com

Phone:02 267 209 84

Main shareholders:C I B; I F C (World Bank Group); FIMBank plc

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THANK YOU!