With steady growth and reaching up to $1 billion a year, this financing mechanism is controlled by 24 companies, mostly banks.
Every year, the activity records growth of between 10% and 20%. "Using a factoring contract, a trader or manufacturer can assign an invoice or other credit document to a factoring company in exchange for a full or partial financial advance" explains an article in Panamaamerica.com.pa.
Multibank has become the third bank to join the Panamanian Facilitation of Foreign Trade Financing Program (TFFP).
Through TFFP, the IDB offers guarantees to cover letters of credit, promissory notes, bid bonds, performance bonds, advance payment bonds and other instruments used in International Trade transactions.
The Banco Financiera Comercial Hondureña S.A. (Ficohsa) and Guatemala's Banco GT Continental, together with several local banks, including Atlántida, BAC-Bamer, GTC Bank, Banco Aliado and Tower Bank, have put together a syndicated loan of 77 million dollars for Corporación Dinant.
The funds will be used for investment in plant and agro-industry. Surplus funds will be used for publicity and marketing.