DIFC Offers First in Factoring and ForfaitingPress Release25 Nov 2007 09:37 am
National Bank of Dubai (NBD), an Emirates NBD company, and FIMBank plc, the Malta-based trade finance institution, today announced that MENA Factors Limited, a joint venture between the two banks, has commenced operations at the DIFC. MENA Factors is the first specialist financial institution in the GCC region to provide a 'one-stop-shop' offering factoring and forfaiting services.
Commenting on the announcement, Nasser Al Shaali, CEO of the DIFC Authority, said: "The DIFC is a centre for new financial product innovations, and is expecting a rapid development in the range of financial services offered to companies in the region. Small and Medium Enterprises (SMEs) are a crucial part of our economy, and by targeting this large and growing group of companies, MENA Factors is supporting the overall development of the market."
MENA Factors aims to meet the requirements of local, regional and international businesses across the GCC initially, and subsequently expanding to include the MENA region. These services are designed to have a strong appeal to those undertaking trade finance transactions and trade receivables, with a focus on SMEs.
Rajesh Thapar, Group Head of Corporate & Institutional Banking, National Bank of Dubai, said: "As the financial industry continues to develop at an unprecedented rate, it is essential for banks to expand their trade finance products to meet the region's ever growing banking needs. At NBD, we are constantly seeking to expand our products, services and regional presence, particularly in the field of factoring and forfaiting."
"We are confident that Mena Factors will establish itself as a key participant in the region's dynamic trade finance receivables market. It has the potential to become the leading 'one-stop-shop' specialist provider of factoring and forfaiting finance and services to the full range of importers, exporters, traders, banks and other institutions doing business in the MENA region", he added.
Margrith Lutschg, President of FIMBank, commented: "MENA Factors will combine FIMbank's technical expertise with NBD's in-depth market knowledge to provide an alternative source of additional funds to companies in the region wishing to fund future growth."
Factoring is a form of commercial finance whereby a business sells its accounts receivable (in the form of invoices) at a discount. Factoring is considered off balance sheet financing, in that it is not a form of debt or a form of equity, which makes it more attainable than traditional bank and equity financing. Forfaiting, or medium-term capital goods financing, is the discounting of international trade receivables on a without recourse basis.