Latin America Reverse Factoring Market Size, Share, & Trends Analysis Report By Category, By Financial Institution, By End-use, By Region, And Segment Forecasts, 2023 - 2030

Latin America Reverse Factoring Market Size, Share, & Trends Analysis Report By Category, By Financial Institution, By End-use, By Region, And Segment Forecasts, 2023 - 2030

Latin America Reverse Factoring Market Growth & Trends

The Latin America reverse factoring market size is expected to reach USD 62.7 billion by 2030, registering a CAGR of 18.0% from 2023 to 2030. The rising initiatives by international associations, governments, and market players to improve reverse factoring services in the region is supporting the market growth. Furthermore, the growing demand for working capital requirements from small and medium enterprises is expected to drive the demand for the market during the forecast period.

Various associations such as FCI, International Factoring Association, Chilean Factoring Association, and The Peruvian Factoring Association are focusing on initiatives to enhance the scalability and efficiency of reverse factoring. For instance, FCIreverse, the SCF solution by FCI, allows FCI members to deploy, start, and participate in various reverse factoring or SCF programs worldwide. FCI developed this platform jointly with the supply chain finance platform, Demica Limited. The FCIreverse platform offers benefits such as no minimum limit on factoring volume, automated supplier onboarding, and minimum time and costs for setting up. This platform is compliant with ISAE 3402 type 2 and ISO 27001 certifications and is available in more than ten Latin American countries. Further, the growing popularity of reverse factoring in Latin America is creating robust opportunities for market players in the region. Several global players are also expanding their footprints in Latin America to monetize the highly profi

table market.

The rising usage of e-invoicing systems in various countries such as Brazil, Peru, Chile, and Mexico has played a vital role in the rise of SCF and open account trade. Financial institutions rely on digital platforms and fintech to provide risk mitigation and finance solutions to clients. With digital technologies integrated into digital platforms, financial institutions can improve supplier onboarding, supervising functions, regulatory compliances, and other servicing functions. This assists financial institutions in risk control and evaluation in reverse factoring services at a lower cost. Thus, the following factor is driving the growth of the market during the forecast period.

Latin America Reverse Factoring Market Report Highlights

• The international segment is expected to experience considerable growth with a CAGR of 21.5% over the forecast period. The international reverse factoring offers to enable smooth trading operations by offering cross-border supply chain financing facilities, it provides suppliers with continuous cash flow facilities, helps in increasing production volume, and offering competitive discounting rates.
• The non-banking financial institutions segment is expected to experience considerable growth with a CAGR of 19.2% over the forecast period. Non banking financial institutions are adopting the latest technologies along with following the latest trends in the reverse factoring market to gain a competitive advantage by offering industry-leading reverse factoring services with competitive discount rates. Such developments are expected to boost the growth of reverse factoring in the NBFIs segment over the forecast period.
• The healthcare enterprise segment is expected to experience considerable growth with a CAGR of 20.6% over the forecast period. Manufacturers in the healthcare industry require smooth cash flow for continuous research and development activities, expansion, and growth of the industry. Supply chain financing provides a multi-funder approach for the healthcare industry, which allows the companies to benefit from multiple mid-tier relationships and provide continuous liquidity.
• The reverse factoring market in Argentina is expected to grow at a CAGR of 26.7% through 2030. The emergence of new businesses and startups in the country along with the growing presence of supply chain factoring service providers is propelling the growth of the market in the country.

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