Learning Labs

Markets & Regions - WOA in China

Open Account Receivables Financing is in a different stage of maturity across different markets and regions. All these markets have one aspect in common: receivables finance is an excellent tool for financing SMEs and the real economy, thus contributing to the creation of jobs and economic growth. China is one of the fastest growing regions for Receivables Finance during the last 10 years. But there are still big gaps in adoption of best practices and even correct understanding of how Factoring, especially international factoring, differs from traditional banking.  With the “WOA in China” learning lab, the WOA community will organize its efforts to promote the adoption, awareness and acceptance of international factoring in China with a specific focus on articles and education that will also be available in Chinese language, as well promote the communication between the peers in China and and other countries.

应收账款融资目前在全球各个市场处于不同的发展阶段。但是所有的市场均有一个共性：应收账款融资对中小型企业和实体经济是绝佳的金融工具，有助于社会经济发展和增加就业。在过去十年里，中国市场是应收账款融资发展最快的地区。但是在那里依然有着对保理融资，尤其是国际保理，区别于传统银行信贷的理解上的差异和不足。WOA中文学习实验室的设立，矢志于整合相应的资源，通过教育等方式，更好的推广有关国际保理相关的知识和理解，并促进中国市场和其他市场行业同仁的交流。

Setting up and Growing a Receivables Finance Operation

How to get started in receivables finance? Which products to choose? Which markets? What are the key drivers for success? Receivables Finance in all of its forms is high on the list of both emerging and mature economies as a tool to support SMEs and economic development. Banks are interested in adding Receivables Finance to their product portfolio but are looking for information and support. This WOA Learning Lab addresses most of the initial questions to be asked when starting with Factoring and Receivables Finance and also offers support and insights for more advanced operations that are looking to grow their product offering. A Lab predominantly focused on knowledge transfer.

International Open Account Trade Finance

Financing Open Account receivables is one thing; Financing Export (or Import) Receivables brings a new dimension. Cross-border factoring offers additional commercial value but also presents additional challenges in terms of legal, operational and credit risks. Different approaches and support systems exist, depending on the international complexity and risk appetite of the Financial institution. This WOA Lab is a centre of excellence and knowledge in this important area of cross border business.

Regulation & Compliance

Open account trade finance involves risks related to “trade-based money laundering” or terrorist financing. Fighting these risks is of extreme importance, both from a social responsibility perspective as from a regulatory & compliance perspective. The purpose of this WOA learning lab is to create and share best practices in the industry, but also to cooperate with other organizations and interact with policy makers to explain where necessary the specificities of open account financing.

Risk Monitoring & Fraud Control

Open account receivables financing requires specific procedures, systems and knowledge to manage a variety of risks. If managed well, the financial losses in case of default of a client are only a fraction of the loss given default for a traditional non-secured bank loan. The risk of fraud is the most difficult to mitigate and therefore probably the most important risk. This WOA learning lab will study and promote best practices in Risk and Fraud control and will share case studies and lessons learned with the community.

Legal Environment

There is no universally applicable legal or regulatory framework for receivables financing. There are however certain initiatives for legal harmonization from the United Nations (UNCITRAL) for assignment of international trade receivables and for a model law on secured lending. The scope of this WOA learning lab is to collect available information on legal aspects for open account financing and to share ideas and best practices with the community.