The factoring market will maintain a growth pace of around 40% in the following years, though we may see some major players enter the market as late as 2009.

"For the moment, though it is rapidly growing, the factoring market is too small to allow for the entrance of some major players," says Valentin Chirca, general manager of Compania de Factoring, a specialised player on this segment, which started operating one year ago.

The domestic factoring market, put at 1.1bn euros for this year, is still dominated by commercial banks that also provide such services. Though several independent players also operate on the market, they are small. Last autumn, two international financial groups, ING and Austria's InterMarket, decided, however, to create specialised players.

Compania de Factoring is held by InterMarket, one of Austria's most important factoring players, in partnership with Banca Transilvania, having been a member of Factors Chain International, one of the world's biggest organisation in this field, right from the start of its operations last autumn.

Chirca says that, by yearend, the company will hit turnover worth 115m euros, compared with a targeted level of 110m euros. Turnover is expected to at least double next year.

In 2007, the company estimates 500,000-euro income, against 2m-euro capital. "We'll operate a significant capital increase, most likely in Q1, 2008 (...)," says Chirca. He estimates the factoring market will climb to 1.7bn euros in 2008, and the company he runs targets a share of 10-15%. Currently, the market is dominated by large banks-BRD-SocGen and BCR.

Compania de Factoring mainly addresses small and medium-sized companies, which can finance their businesses by selling accounts receivable at a discount. Over 95% are firms with annual turnovers worth below 10m euros, while only 4% are medium-sized firms. @N