Estonian factoring success

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Estonian factoring success
Sven Randoja 24. October 2003 Warsaw
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Estonia

• ESTONIA
• Capital - Tallinn
• Population - 1.4 million
• Currency - Estonian Kroon (EEK)
• Exchange Rate-
• EUR 1 15,646 EEK
• GDP 6,9 bn EUR

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Estonian economy
Macroeconomic highlights
1999
2000
2001
2002
2003E
1994
GDP
-0.6
-2.0
7.3
6.5
6.0
4.7
GDP/capita (EUR)
3536
5060
4059
4568
5432
1290
2,238
3,443 (54)
3,695 (7)
3,633 (-2)
4,000 (10)
1,000
Exports ( m, )
4,614 (43)
4,796 (4)
3,222
5,077 (6)
Imports ( m, )
5,635 (11)
1,284
-984
-1,171 (19)
-1,101 (-6)
-1,444 (30)
-1,635 (14)
-284
Trade deficit ( m, )
-4.7
-6.1
-6.2
-12.5
-7,2
CAD / GDP,
-14.5
CPI
3.3
4.0
5.7
3.6
1.4
47.7
Unemployment
12.3
13.7
12.6
10.3
9.9
7,3
FX rate EEK/EUR
15.65
15.65
15.65
15.65
15.65
-
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Estonian economy
Financial sector

• Concentration
• 50 banks in 1992
• 7 banks in 2003
• Foreign capital inflow
• 86 foreign investment
• SEB
• Swedbank
• Nordea
• Total corporate loans
• 270 mio EUR in 1994
• 2,68 bln EUR in 2003
• Intrest rate (short term average)
• 24,3 in 1994
• 3,5 in 2003
• Stock exchange formed in 1996

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Development of factoringmarket
History of factoring market

• Started in 1994
• 3 players in the market
• Hansa Leasing
• Ühisliising
• Bank of Tallinn
• Constant growth
• In 1998 Hansa Leasing joined FCI
• In 2002 Ühisliising started cooperation with
  Gerling NCM

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Development of factoringmarket
Portfolio Turnover
m
m
Source Ühisliising
7
Development of factoringmarket
Market penetration
Factoring in Estonia - of GDP of GDP compare
to other countries
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Development of factoringmarket
Drivers of success

• Easy alternative financing instrument
• Promotion, good image
• Risk assessing easier
• Public sector projects
• Electronic data exchange
• No alternative for credit insurance

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Factoring today

• Concentration
• 5 players in the the market
• 2 players owns 90 of the market
• Hansa Leasing owns 60 of the market and
  Ühisliising 30
• Steady growth
• More sophisticated
• Electronic data exchange
• Traditional factoring no more investment
  projects
• Share of total volume
• Export 20
• Domestic 77,
• Tax and import 3

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Factoring today
Factoring by sector
Wholesale and retail sale have been one of most
rapidly grown business sectors in Estonia.
Source Ühisliising 2003
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Factoring today
Factoring clients
Factoring clients structure Factoring turnover by
client group
Source Ühisliising 2003
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Factoring market outlook

• Steady growth in pace of economy growth
• More advanced technology
• E-business
• Market stays concentrated
• Market enters credit insurance company

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Contact
Ühisliisingu AS Tornimäe 2 10145
Tallinn Estonia Tel [phone] Faks 372
66 57 987 e-post sven.randoja_at_yl.ee