Firm woos smes with longer credit

Tan Ley Yen, chief executive officer of IFS Capital - the lead-

ing provider of factoring and leasing services in Thailand - said the factoring business focused on providing working capital in exchange for client's trade receivables for both domestic and overseas business.

The services help improve the liquidity of Thai businesses.

"So far, local businesses have seen the benefits of using the

factoring services from IFS Capi-

tal but the number of exporters using the services remains small," he said.

"Many SMEs are having problems when selling products to

international buyers or when receiving orders from overseas

due to their lack of knowledge

about the buyers. They have difficulty in granting credit terms to overseas buyers, as they are uncertain about the buyer's financial status. However, without offering adequate credit terms to customers, it may be difficult for them to compete with overseas competitors," he explained.

"Not being able to offer credit terms or having no confidence in the customers due to lack of previous business experience with them may result in a loss of business. IFS Capital helps solve these problems," he said.

He added that factoring ser-vices would enable Thai exporters to compete with foreign competitors, and help smaller players

to compete with larger companies.

Competition is not just a matter of pricing but also offering good credit terms when making payments, he added.

Big players may operate on credit terms of 30-60 days, but smaller companies can offer terms as long as 90-180 days if they use factoring services.

IFS Capital is the only company in Thailand that is a mem-

ber of the International Factors Group (IFG), the oldest factor-

ing chain in the world. IFG has 120 members from over 50 countries.

The company has a wide network to check and verify the status of buyers. IFS Capital also provides collection services and credit guarantee to exporters through this network.

SMEs in Thailand can also avail its leasing and hire-purchase services, and as it provides a higher financing ratio it has an edge over banks. It also promises credit approval in less than 10 working days.

The company is targeting factoring business volume of Bt18.6 billion this year, up 28 per cent

from Bt14.5 billion last year. Most of its clients are from the automotive parts, packaging, printing, electronics and chemical industries.

Bangkok will be hosting the annual IFG meeting from June today until Thursday at The Oriental. The theme of the meeting, "Breakthrough Evolutions", will focus on the evolution of factoring to asset-based lending. About 100 delegates from over 50 countries will be participating in the meeting, Tan said.