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Wednesday, Aug 30, 2006

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HSBC extends factoring service to SMEs

Our Bureau,

Banglaore , Aug. 29

HSBC today announced the launch of factoring services to SMEs, whose rise in the wake of strong export growth has expanded opportunities in the financial business stream.

The service would be available at Mumbai, New Delhi, Kolkata, Pune, Bangalore and Chennai.

HSBC, which had been providing the factoring services to large corporates since 2005, decided to focus on SMEs due to their large contribution to the economy as factoring would help small businesses achieve faster growth by efficiently managing their working capital.

Announcing the launch of the service on Tuesday, Mr Bhriguraj Singh, Senior Vice-President and Head Factoring (India), said that HSBC with a large SME customer base would not be looking at any particular sector of the business for its factoring service.

Key determinant

He added that the key determinant would be the quality of the product or services that could fit within the manageable risk.

Stating that the ITES sector would be a business prospect, Mr Singh said that the bank would not be averse to IT product companies and would be factoring their transactions based on the parameters measurable risks.

Useful to export trade

Factoring is useful not only in export but also in export trade. It gains importance in today's international trade since international buyers are increasingly unwilling to enter into letter of credit-based transactions due to the additional monetary and administrative costs involved.

The bank has already deployed 200 people to promote the product among SMEs and would add more manpower as the business expanded, he said.

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