LONDON--(BUSINESS WIRE)--Technavio’s latest market research report on the global factoring market provides an analysis of the most important trends expected to impact the market outlook from 2018-2022. Technavio defines an emerging trend as a factor that has the potential to significantly impact the market and contribute to its growth or decline.
According to Technavio market research analysts, the global factoring market will grow at a CAGR of over 13% during the forecast period. The growing need for an alternative source of financing for MSMEs is a major factor driving the market’s growth.
To expand business, develop new products, and invest in better inventory management systems and production facilities, financing is very important for MSMEs. Financing can be done through internal or external sources. The limited availability of funds compels these firms to look for external sources of financing, which include loans from banks, investments from venture capitalists in their business, factoring, and others.
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In this report, Technavio highlights the advent of blockchain in factoring services as one of the key emerging trends in the global factoring market:
Advent of blockchain in factoring services
Bitcoin is the most modern form of cryptocurrency and popular financial technology. In 2017, it touched new heights in terms of price surge. Blockchain, which is bitcoin's underlying technology, is driving a steep growth, in terms of both value and acceptance in the mainstream payment mode. Blockchain has the ability to transform the ways in which exchanges, such as the stock market, patent awarding, and factoring, takes place. To underpin its new private share-trading market, the National Association of Securities Dealers Automated Quotations (NASDAQ) has started using blockchain.
“A major factor driving the growth of the global blockchain technology market in the Banking, Financial services, and Insurance sector is the increasing investments in blockchain technology by governments of various countries. Countries such as the UK, Canada, Russia, and China are experimenting by placing their national currencies on the blockchain,” says a senior analyst at Technavio.
In the future, blockchain technology will be used extensively in trade finance. This is because some developed nations will test the affordability of the technology in the field of trade finance. A major barrier for the industry will be compliance regarding anti-money laundering and know-your-customer (KYC).
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Global factoring market segmentation
This market research report segments the global factoring market into the following type of factoring, including domestic factoring and international factoring and key regions, including the Americas, APAC, and EMEA.
The domestic factoring segment held the largest market share in 2017, accounting for nearly 79% of the market. The market share for this type of factoring is expected to increase nearly 2% by 2022.
EMEA was the leading region for the global factoring market in 2017, accounting for a market share of nearly 64%. By 2022, EMEA is expected to continue dominating the market and register the highest growth rate of nearly 3%.
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