“In early 2019, the first alternative financing company in Lithuania Debifo merged with the Netherlands company Factris; thus it was crucial to smoothly harmonise processes at the group level, improve the financing infrastructure, adjust the market strategy, automate risk evaluation. Particularly much attention was allocated to the portfolio’s quality; we increased the insured factoring portfolio share, improved client monitoring procedures, which allow reacting to client risk changes rapidly. Furthermore, last year we successfully completed expansion into neighbouring Latvia,” Factris LT1 executive director Paulius Jauga said.
Most relevant for small, but for high economic value-creating businesses
In 2019, the company’s client base grew by 47%.
Factris LT1 data shows that the largest part of the company’s factoring portfolio was made up of the retail sales, transport and employment service businesses after the construction, food product, furniture manufacturing and sales companies follow.
“One of the main reasons why factoring services are most important for namely these sectors is a lack of working capital. For example, if it is necessary to pay suppliers within 15 days, but customers pay after 30 or more days, a 15 day frozen working capital period appears, where you cannot pay wages to your staff, purchase raw materials and secure further turnover. Furthermore, these sectors correlate with Lithuania’s largest sectors. In them, there are also small companies, which are not financed by banks. Also, it is worth noting recently emerging employment agencies, which employ individuals in foreign companies. That said, a part of this sector can indirectly be associated with the construction sector because staff are sent to build houses, ships and such,” P. Jauga notes.
According to Factris LT1 data, usually, businesses allocate received financing to balance monetary flows, settle accounts with staff, suppliers and creditors or for expansion, the bringing of new services or products into the market. The sum of financed accounts in 2019 ranged from 1 thousand euro to almost 650 thousand euro.
This year, the company also began to finance smaller invoices of less than 1 thousand euro.
2020 – innovative solutions and growth
“In late 2019, we fully implemented a platform, which automated several so far mechanical tasks. This allowed allocating more time for clients and quality service. This platform leads on to a client self-service in Q1 2020, which will further simplify the process of account financing,” P. Jauga mentions client-friendly solutions.
Among this year’s plans is further strengthening of client service quality and a consistent increase in the portfolio’s scope.
Furthermore, last year Factris LT1 secured an EU grant for its risk evaluation system’s development. This innovative factoring case risk management system will soon contribute to more rapid financing solutions.
The fintech company Factris was founded in Amsterdam in 2017. In January 2019, it merged with Lithuania’s first non-banking account financer Debifo. Currently, the company offers its services in the Netherlands, Lithuania and Latvia. Its short-term plans are to expand into more EU countries and become the largest non-banking factoring leader in all of Europe.
