Factors contributing to growth have yet to make a significant impact.
The factoring market in Q2 2025 has experienced a downturn, with key players reporting a decrease in their portfolios. This negative trend can be attributed to a combination of factors, including high key interest rates, economic uncertainty, and tightening financial conditions.
Dmitry Shevchenko, Executive Director of AFK, has stated that the primary driver of portfolio reduction is the cost of ruble liquidity, which increases as key rates rise. This higher cost of borrowing for factoring companies, which rely on short-term financing to provide liquidity against accounts receivable, discourages new factoring transactions and reduces demand for factoring services.
The high key interest rate of 21% set by the central bank is a significant headwind for the factoring market. In addition to raising financing costs, it also limits credit availability, making it more challenging for businesses to access the funds they need to maintain their operations.
Economic uncertainty and cautious corporate spending have also played a role in the market's contraction. Global economic uncertainty due to trade policy tensions and volatile markets has led to subdued credit demand and careful financial management by businesses, reducing their reliance on factoring as a financing tool.
The high key interest rate and economic uncertainty have impacted corporate liquidity and trade. Trade policy uncertainty and elevated tariffs disrupt supply chains and raise costs for businesses, which may reduce the volume of receivables that can be factored. Additionally, if businesses conserve cash due to rising costs and uncertain demand, the factoring market contracts correspondingly.
Despite the challenging environment, some factoring companies are still experiencing growth. For instance, the number of active clients in January-June 2025 increased by 18.6% compared to January-June 2024, reaching 16.6 thousand companies. Vladimir Teterin expects moderate growth in Q3 for classic factoring financing.
However, some companies have underperformed the market. The portfolio of VTB Factoring decreased by 19.3% in Q2, while RSKB Factoring's portfolio decreased by 9%. Mikhail Yatsenko, CEO of RSKB Factoring, explained that the decrease in Q2 results is directly tied to the January-March financing volume, which typically sees a slowdown in business activity.
In conclusion, the high key interest rate of the central bank is a key headwind for the factoring market in Q2 2025 by raising financing costs and limiting credit availability, while macroeconomic and trade uncertainties further suppress demand for factoring services. This combination leads to the observed negative dynamics in the factoring market during this period.
Sources: [1] Kommersant [2] Forbes Russia [3] Vedomosti [4] RBC
- The high interest rate set by the central bank, along with economic uncertainty, has been a significant factor influencing the reduced demand for factoring services within the business industry.
- The cost of borrowing for factoring companies, increase in key interest rates, and tightening financial conditions have contributed to a decline in the finance sector, affecting the factoring market's performance.
