German factoring market 2021: Strong growth despite or alongside Covid
In 2021, the turnover of the German factoring association’s (Deutscher Factoring-Verband e.V.) members grew distinctly by 10.8% and amounted to 309.4 billion Euro. This is an unexpectedly positive result in the second year of the pandemic, which saw some economic improvement for Germany in comparison to the year before. The German GDP increased by around 2.7%. In relation to the GDP, factoring actually developed four times as strongly, which is why the factoring ratio (which measures the relation between the volume of purchased receivables of the German factoring companies and the total GDP) also rose to now 8.7%. The old tenet that years of crisis are good years for factoring was also proven true during the second year of the Covid-pandemic. All the while, factoring contributed to sustaining the financing of enterprises and supply chains. More than 80,000 clients successfully used factoring in 2021.
„Despite or alongside Covid, factoring was able to set a new turnover record with an increase of 10.8% and total turnover of 309.4 billion Euro – a very positive result in the second year of the pandemic“, Michael Menke, spokesman of the German factoring association´s executive board, comments on this favourable outcome.
For international factoring, 2021 was another successful year: Due to the overall growth rate of 27.8%, pre-pandemic results were reached, this kind of growth was last achieved in 2010. The total volume of export factoring amounted to 82.8 billion Euro in 2021 (+27.9%). Import factoring shone with an increase of 26% to now 5.5 billion Euro. Apart from catch-up effects since 2020, goods and services „made in Germany” apparently found their way abroad more frequently and successfully than before.
By growing with 5.2% to now 221 billion Euro, national factoring also contributed to the favourable consolidated outcome for the market in 2021, if not as strongly as international factoring. As was to be expected in times of working from home and changed consumer habits, B2C-factoring also grew significantly by nearly 18% to now 8.5 billion Euro.
The new record high in turnover shows that factoring was used increasingly, both by big and small enterprises. Notwithstanding and for the first time in six years, the turnover volumes in terms of the number of factoring clients in the SME-typical turnover segment of up to 10 million Euro experienced a first, if only marginal decrease from 95.4% of all clients in 2020 to 94.5% in 2021.
Even though the German factoring market faces challenges mainly due to national and international regulatory and supervisory requirements, there should be worthwhile opportunities in 2022 for well-positioned providers to gain further market shares in relation to traditional forms of financing and also to amplify new areas of business.
These favourable developments are also reflected in the particularly positive assessment of the economic situation by the DFV’s members, even though this annual outlook survey was carried out before the invasion of Ukraine: 70% of the members expected a “good or very good” development and 30% of the members foresaw a “satisfactory” progress, worse predictions or assessments were not provided.
According to neutral studies, the members of the German factoring association represent around 98% of the factoring market organized in associations in Germany. The figures of the German factoring association can therefore be considered the leading benchmark of the whole German factoring market.
For detailed information, please consult our current Annual Report („Jahresbericht“) for 2021 at www.factoring.de.
You can also follow the German factoring association (Deutscher Factoring-Verband e.V.) on LinkedIn.
