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International Factoring Gaining Popularity in Bangladesh

The concept of factoring is gaining popularity in Bangladesh as a means of gaining a strong foothold in Bangladesh financing compared to traditional modes of funding through the banks. Here, access to funds is quicker as well as cheaper, and does not require any security and collateral whatsoever. As an integral part of the RMG supply chain, the factoring against the receivables of exporters help them avoid a cash-flow crisis. DS-Concept, an established factoring company with its presence in the US, EU, China, UAE and Turkey, is already operating in Bangladesh since 2008. 

There comes a time when the growing requirements for LC margin go beyond its financial limits with the banks and to fulfil the demand of the importers for credit terms, exporters in Bangladesh need to export under international factoring which is also as secured as LC. North American and European importers are less interested in opening LCs; all these reasons put together make nonrecourse factoring a valuable alternative, creating security and working capital for both parties involved. 

Continuing to adapt with the market demands, the company has recently announced advance rates of up to 95% for its non-recourse export factoring facilities. Explaining the same, Ekram Hussain, Managing Director, DS-Concept Factoring Bangladesh says, “With non-recourse factoring, the factor assumes responsibility for all bad debts. This means that if a customer does not pay an invoice, either through insolvency or protracted default, you do not have to pay back the amount advanced to you by the factor.” Recently, DS-Concept opened its new office at Badda-Gulshan Link Road in Dhaka to accommodate its rapid growth in Bangladesh.

Source: Apparel Resources

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