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Factoring in Egypt

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  1. Factoring in Egypt Benefits to Egyptian businesses Cairo 13-Jan-2010

  2. AGENDA • What is factoring? • Factoring statistics for Egypt • Factoring packages available in Egypt • Factoring versus other products • Conclusion International Factoring Promotion Conference, Cairo, 13-Jan-2010

  3. AGENDA • What is factoring? • Factoring statistics for Egypt • Factoring packages available in Egypt • Factoring versus other products • Conclusion International Factoring Promotion Conference, Cairo, 13-Jan-2010

  4. WHAT IS FACTORING? Package of financial services whereby you assign* invoices to the FACTORfor the benefit of… Risk Protection Financing Debt Collection * assignment notification might be required International Factoring Promotion Conference, Cairo, 13-Jan-2010

  5. WHEN MAY FACTORING APPLY? • Commercial invoice • Sales on credit • [contractual relationship; up to 180 days credit terms] • Continuous relationship • Clear/Clean performance [no sale or return (consignment) no counter sales, no performance claims] • Clearsales title & enforceable receivables [no legal constraints, clear ownership of the goods] • Spread of buyers [“not all eggs in one basket”] International Factoring Promotion Conference, Cairo, 13-Jan-2010

  6. AGENDA • What is factoring? • Factoring statistics for Egypt • Factoring packages available in Egypt • Factoring versus other products • Conclusion International Factoring Promotion Conference, Cairo, 13-Jan-2010

  7. FACTORING STATISTICS International Factoring Promotion Conference, Cairo, 13-Jan-2010

  8. REQUIREMENTS FOR FQACTORNG COMPANIES • Minimum capital of EGP 10Mio • Factoring should be the sole activity or should maintain separate books for the factoring activity • One of the shareholders should be a financial institution • Managing Director or Executive Officer should hold an university degree with an experience of more than 10 years in the financial or banking fields International Factoring Promotion Conference, Cairo, 13-Jan-2010

  9. AGENDA • What is factoring? • Factoring statistics for Egypt • Factoring packages available in Egypt • Factoring versus other products • Conclusion International Factoring Promotion Conference, Cairo, 13-Jan-2010

  10. WHERE FACTORING HELPS YOU? Purchase Factoring Receivables Factoring FACTOR Domestic Purchase Domestic Sales CLIENT Buyer / Seller Foreign Purchase Foreign Sales Complete Trade Finance Solutions International Factoring Promotion Conference, Cairo, 13-Jan-2010

  11. EXPORT FACTORING International Factoring Promotion Conference, Cairo, 13-Jan-2010

  12. DOMESTIC FACTORING International Factoring Promotion Conference, Cairo, 13-Jan-2010

  13. PURCHASE FACTORING International Factoring Promotion Conference, Cairo, 13-Jan-2010

  14. AGENDA • What is factoring? • Factoring statistics for Egypt • Factoring packages available in Egypt • Factoring versus other products • Conclusion International Factoring Promotion Conference, Cairo, 13-Jan-2010

  15. FACTORING vs. OTHER PRODUCTS FACTORING • Post shipment • Performance & Debtor • Payment Risk • Cash flow/Portfolio/Buyer driven • Value proposition for all clients • (including SME’s) • Liquidity linked to growth • Value added - risk management • Without/Limited (performance) recourse BANK FINANCE • Pre & Post shipment • Financial Risk • Security/Collateral driven • Price effective for good Balance Sheet • Liquidity linked to Security • Mainly financing • Always with recourse International Factoring Promotion Conference, Cairo, 13-Jan-2010

  16. FACTORING vs. OTHER PRODUCTS FACTORING [FCI] • Assignment required • Risk cover up to 100% • No down payment; charges linked to the actual turnover • No maximum annual claims • Claim payment by maximum 120 days from due date • Financing available upon assignment • Commercial collection included CREDIT INSURANCE • No assignment required • Risk cover up to 90% • Advance premiums; charges linked to forecasted turnover • Maximum annual claims • Claim payment by maximum 180 days from due date • No financing available • No commercial collection available International Factoring Promotion Conference, Cairo, 13-Jan-2010

  17. AGENDA • What is factoring? • Factoring statistics for Egypt • Factoring packages available in Egypt • Factoring versus other products • Conclusion International Factoring Promotion Conference, Cairo, 13-Jan-2010

  18. CONCLUSION International Factoring Promotion Conference, Cairo, 13-Jan-2010

  19. CONCLUSION We cannot change the direction of the wind, however we can adjust our sails!

  20. YOUR PARTNERS IN EGYPT Export Credit Guarantee Co. of Egypt (ECGE) • Web: www.ecgegypt.net • E-mail: ecge@ecgegypt.net • Phone: 02 226 367 40 • Main shareholder: Export Development Bank of Egypt; National Investment Bank EGYPT FACTORS S.A.E. • Web: www.egyptfactors.com • E-mail: info@egyptfactors.com • Phone: 02 267 209 84 • Main shareholders: C I B; I F C (World Bank Group); FIMBank plc THANK YOU! International Factoring Promotion Conference, Cairo, 13-Jan-2010