Visit of Russia by the Secretary General of the International Factors Group

The difference today is that the international two-factor flows are more and more to be seen between continents than between countries within Europe. Asia became the second most important continent for factoring activities in 2004, jumping over the America’s. In almost all East European countries, factoring is hot and almost every day new initiatives are started by local companies or local bankers. This “overseas” trade will be more and more conducted in open account, where the two-factor system can offer a perfect solution to reduce risks for the exporter, while still granting open account terms to the importer.The International Factors Group has adapted its strategy accordingly. Core product of IF-Group remains the support of a high-end operational platform, which allows members to do cross border Factoring business in a technical and legal safe environment. But in addition to this core service, IFG has an important role to play in supporting international factoring business in general. For this reason, IFG has opened up its membership to non-active members and partners which are interested to be part of an international Trade Association for reasons of networking, education, lobbying and keeping an eye on the general evolution and development of their industry. Today, we already have opened up membership to leading Service Providers in various fields of Legal advice, IT solutions, Risk Management, Human Resources and Training services. Next to that, we have organized the Group in different geographical chapters (Asia, East Europe and Africa) which help us in developing locally what the Group thinks is the way forward globally. And finally IFG has decided to join forces with some of the most important National Factoring Associations, such as CFA (USA) and FDA (UK & Ireland) in fields of lobbying and education.

From 8th till 11th August 2006 I had the pleasure of visiting St-Petersburg and Moscow. Together with Mikhail Treyvish, CEO of National Factoring Company, market leader in the Russian factoring scene, and who is also chairman of the East European Chapter of the International Factors Group, we did some site inspection so we can make a proposal to the board of IFG concerning the organization of one of our next annual meeting conferences in St-Petersburg. And of course I also visited their offices in Moscow where I met with their international manager Corneliu Robu.

In Moscow, I had the pleasure of meeting with another member of the IF-Group: Banque Soci?t? G?n?ral Vostok, where I had a meeting with the CEO Marc-Emmanuel Vives, the Deputy Head of Corporate Banking Alexandre Mey, the Head of Factoring Ilya Pokamestov and their international Manager Ksenia Petschenkina. BSGV has a clear strategy for the development of their domestic and international factoring activities in the future and their link with IF-Group can of course help them in this mission.

I have also met with two potential members of our international association. There is obviously a keen interest by the rapidly growing Russia Factoring industry to take the step to International business. And I am sure that there is a huge growth potential for cross-border factoring activities in this country. Import factoring business will grow driven by the reverse marketing activities from the big Russian factoring players and by the growth of smaller independent import companies finding their place next to the big distribution chains or integrated retail stores of international brands. But export will certainly grow as well, as soon as more smaller and medium sized companies will develop their international business. And knowing that the Russian Government has the strong intention to support the growth of their SME’s, export factoring will be an important tool to achieve this goal.

But of course, the Russian Factoring Industry will have to cope with certain barriers. Some legal barriers seem to have been lifted recently in the field of cross-border factoring business. But the biggest barrier might be the shortage of trained factoring professionals. In order to be successful in factoring it is indeed of utmost importance to understand the differences in marketing, operations and risk assessment between factoring and other finance instruments. The International Factors Group tries to help closing the training gap by organizing an International Factoring Foundation Course which will take place for the first time in September this year in Warsaw, but which might very well be repeated some times next year in Moscow and other East European cities where factoring starts to expand. The International Factors Group has of course the advantage of having two Russians within its leadership structure: Mikhail Treyvish (National Factoring Company) as board member and Chairman of the East European Chapter of IFG and Ilya Pokamestov (BSGV) as member of the Education Committee of IFG.

I am convinced that Russia will be often on my travel schedule in the coming years.