OREANDA-NEWS  In the first half of 2024, Russia maintained high growth rates of the factoring market (loans secured by receivables). Kommersant reports on the popularity of one type of loan, despite the high key rate, with reference to data from the Association of Factoring Companies (AFC).

In six months, the total factoring portfolio increased by 45 percent year-on-year, to 2.35 trillion rubles. Industry representatives explain the demand for such services in conditions of tight monetary policy by the fact that factoring contracts are concluded for a short period of time, so the rate and cost of funding are of less importance. For a period of 60-70 days, the real rate of attracting liquidity, taking into account rising inflation, becomes cheaper than for loans issued for a period of more than a year, added Dmitry Shevchenko, Executive Director of AFK.

Mainly, factoring is used by manufacturers of consumer goods, representatives of trade, industry and logistics, who constantly need money for working capital. According to Pavel Shishov, managing director of factoring at Alfa-Bank, companies "sew in" the rate for factoring into the cost price.

Against the background of the growth of the key rate, the placement of short-term liquidity and financing of small and medium-sized businesses is becoming one of the important priorities of the leading banking groups, Shevchenko added. "Working capital is needed "here and now", whereas with some investment projects it is possible to wait. And in conditions of high rates, it is easier to service short—term debt," explains Kirill Pokrovsky, director of the ICD Factoring department.

The Center for Macroeconomic Analysis and Short-term Forecasting (CMACP) warned that the expected next increase in the key rate of the Bank of Russia in July could lead not only to a cooling of the economy, but also to a "quiet crisis" in the banking sector. Further tightening of the PREP will require urgent recapitalization of systemically important organizations. An increase in the rate will lead to problems for borrowers with a high debt burden. They may face the inability to repay loans through new borrowings, as they did earlier, analysts said.