Trade finance experts have urged development finance institutions (DFIs) and banks to do more to support the expansion of cross-border factoring in India, where international factoring volumes remain strikingly small relative to the country’s export ambitions.
During a panel at the 360tf Global Trade Finance Summit in India’s Gift City last week, industry leaders including former FCI secretary general Peter Mulroy said DFI-backed guarantee schemes and greater bank participation could help address the imbalance.
According to FCI’s global factoring stats, India recorded €42bn in domestic factoring turnover in 2025, but just €1.5bn internationally – a fraction of its roughly US$860bn in annual goods exports. The government is targeting US$2tn in exports by 2030.
FCI’s figures showed that India’s total of €43.5bn placed it well behind other major economies, with its international factoring volume among the smallest recorded relative to its trade volumes.
According to the group’s annual report, global factoring volumes hit €4.04tn last year. China led the market with €713bn in total factoring volume (€664bn being domestic and €49bn international), followed by France (€439bn) and Germany (€423bn).
Mulroy, who is now a board member at 360tf, said India’s factoring growth rate had been close to 25% a year over the past decade, much “like the China story back from 2005 to 2015”. But he argued that stronger institutional and regulatory support was still needed to maintain that growth.
He pointed to Chile and Egypt as developing market success stories, attributing their growth to dedicated factoring laws, sound regulation, e-invoicing and efforts by national factoring associations.
Gloria Mamba, chief executive of TDB Asset Management, the asset management arm of the Trade and Development Bank, said that guarantee schemes could help close factoring gaps in emerging markets.
She said TDB’s programme of issuing guarantees to facilitate factoring “is really helpful” and that the lender “expanded the scope of who benefits from our guarantees to include companies, non-bank financial institutions, and others such as micro lenders so that the benefits are spread widely”.
Mamba added TDB has issued US$150mn in guarantees over roughly five years “that have facilitated US$1.8bn in trade”.
Mulroy also pointed to a challenge in bank behaviour in markets with guarantee-backed factoring schemes, noting some lenders still defaulted to traditional loans even where guarantee support was specifically available for factoring, citing Angola as an example.
He argued that regulators should go beyond offering guarantees and mandate the uptake of factoring directly by “requiring banks to have at least a portion of their capital outlay based on factoring”.
360tf co-founder Pankaj Mundra said banks and investors alike needed to “wake up” to funding and partnering with factoring companies, and called on DFIs to back new factoring ventures based in the Gift City special economic zone in Gujarat.
The 360tf summit came as Gift City regulators unveiled new rules allowing eligible finance companies to benefit from capital relief on cross-border credit-insured factoring exposures.
GTR also reported yesterday that India Factoring has launched a wholly owned subsidiary in Gift City to offer factoring and trade finance solutions to exporters and businesses seeking to unlock liquidity, manage trade risk and optimise working capital.
