Cairo Factors company aims to increase its activity during the coming year to EGP 500m, up from EGP 350m this year.
Director of the company, Tamer Sadek, told Daily News Egypt that the company’s market share this year was 8.1% of the factoring activity in Egypt, which reached $4.3bn.
He noted that the factoring sector is promising for small and medium enterprises to obtain their dues in large companies, so that they can quickly rotate their limited capital.
The company’s capital is EGP 10m and its shareholders are SAIB Bank (40%) and other investors (60%).
Sadek said there is a study to increase the capital of the company over the next year under the target growth, with negotiations ongoing with SAIB and investors on the matter.
He refused to disclose the amount by which the capital will increase, noting that it will be determined after studies and negotiations.
Factoring is a contract between the seller and the factoring company whereby the short-term cash rights are bought from the seller for an agreed upon percentage.
Allied International Trading Consulting Partner Aliaa Soliman said that factoring is an important link in financial inclusion and the entry of the informal sector into the formal economy, as it provides solutions that banks cannot provide, such as the collection of bills and short-term loans for periods of a month and up to a year.
She added that the growth of the factoring sector will help the growth of small and medium enterprises through providing 75% of working capital in Egypt, hence growing the economy, as these companies often suffer from unavailability of funding.