South Korea Factoring Market Size, Share, and COVID-19 Impact Analysis, By Type (International and Domestic), By Organization Size (Small and Medium Enterprises, Large Enterprises), and South Korea Factoring Market Insights, Industry Trend, Forecasts to 2035

South Korea Factoring Market Insights Forecasts to 2035

• The South Korea Factoring Market Size is Expected to Grow at a CAGR of around 5.90% from 2024 to 2035 
• The South Korea Factoring Market Size is Expected to reach a significant share by 2035.

According to a research report published by Spherical Insights and Consulting, The South Korea Factoring Market Size is expected to grow 5.90% CAGR from 2024 to 2035, is expected to reach a significant share by 2035. One of the main factors propelling the market include South Korea's rapid economic growth, the rise in small and medium-sized businesses (SMEs), the incorporation of new technologies, the introduction of government initiatives that support them, and the growing significance of credit risk management.

Market Overview

The financial services industry in South Korea is known as the "factoring market," where companies sell their invoices and other accounts receivable to third-party financial institutions, or "factors," at a discount. Businesses benefit from this practice's instant cash flow, which helps with working capital management, credit risk mitigation, and liquidity enhancement. Furthermore, A factor driving growth is the implementation of encouraging government programs to encourage the funding of startups and SMEs. In addition, the growing significance of credit risk management in corporate operations is driving market expansion by increasing the allure of factoring, which offers credit protection. Furthermore, the market is expanding favorably due to the extensive use of the service as a financial inclusion tool, which helps companies that might not otherwise have access to traditional banking services. Additionally, the market is expanding due to companies' increasing use of factoring to maximize supply chain financing.

Report Coverage

This research report categorizes the market for the South Korea factoring market based on various segments and regions and forecasts revenue growth and analyzes trends in each submarket. The report analyses the key growth drivers, opportunities, and challenges influencing the South Korea factoring market. Recent market developments and competitive strategies such as expansion, product launch, and development, partnership, merger, and acquisition have been included to draw the competitive landscape in the market. The report strategically identifies and profiles the key market players and analyses their core competencies in each sub-segment of the South Korea factoring market.

Driving Factors

The market expansion is being supported by South Korea's rapid economic growth, which creates an atmosphere that is conducive to the growth of factoring services. Furthermore, the market is expanding due to the growing number of small and medium-sized businesses (SMEs) that face cash flow problems and the resulting demand for factoring services. In addition, the market is expanding due to the growing need for international factoring services to handle cross-border transactions. Additionally, the market is expanding as a result of the incorporation of new technologies like blockchain and artificial intelligence (AI) into factoring procedures to improve security, efficiency, and transparency.

Restraining Factors

Many companies are hesitant to factor because they fear that selling accounts receivable could give customers the impression that they are unstable financially. This impression has the potential to harm client relationships and future business prospects, particularly in industries where long-term partnerships and trust are essential.

Market Segmentation

The South Korea Factoring Market share is classified into type and organization size.

• The domestic segment held a significant share in 2024 and is expected to grow at a significant CAGR during the forecast period.

The South Korea factoring market is segmented by type into international and domestic. Among these, the domestic segment held a significant share in 2024 and is expected to grow at a significant CAGR during the forecast period. Its dominance stems from the high demand for working capital solutions among the nation's large corporations and small and medium-sized businesses (SMEs). Domestic factoring facilitates receivables management, reduces credit risk, and helps businesses manage cash flow.

• The small and medium enterprises segment held a significant share in 2024 and is expected to grow at a significant CAGR during the forecast period.

The South Korea factoring market is segmented by organization size into small and medium enterprises and large enterprise. Among these, the small and medium enterprises segment held a significant share in 2024 and is expected to grow at a significant CAGR during the forecast period. SMEs are the main forces behind market demand since they mainly depend on factoring services to manage working capital, cash flow, and credit risk.

Competitive Analysis:

The report offers the appropriate analysis of the key organizations/companies involved within the South Korea factoring market along with a comparative evaluation primarily based on their product offering, business overviews, geographic presence, enterprise strategies, segment market share, and SWOT analysis. The report also provides an elaborative analysis focusing on the current news and developments of the companies, which includes product development, innovations, joint ventures, partnerships, mergers & acquisitions, strategic alliances, and others. This allows for the evaluation of the overall competition within the market.

List of Key Companies

• Korea Factoring Co., Ltd.
• Shinhan Bank
• Hana Bank
• IBK

Recent Developments:

• In December 2023, the government announced plans to provide accounts receivable factoring services worth KRW150 billion, which was KRW60 billion more than the previous year. KODIT committed to providing SMEs with at least KRW90 billion, ensuring they had consistent support, even after middle-market businesses were added in 2024.

Key Target Audience

• Market Players
• Investors
• End-users
• Government Authorities 
• Consulting and Research Firm
• Venture capitalists
• Value-Added Resellers (VARs)

Market Segment

This study forecasts revenue at South Korea, regional, and country levels from 2020 to 2035. Spherical Insights has segmented the South Korea Factoring Market based on the below-mentioned segments:

South Korea Factoring Market, By Type

• International
• Domestic

South Korea Factoring Market, By Organization Size

• Small and Medium Enterprises
• Large Enterprises