Standard Chartered is touting its factoring services as an alternative form of trade finance for customers that routinely use letters of credit (L/Cs).

The emerging market specialist bank is one of several international financial institutions offering factoring services in Asia, Africa and the Middle East.

L/C alternative

Standard Chartered's group head of transaction banking, Karen Fawcett, wants customers to look at the bank's L/C alternatives, such as factoring.

She notes that while OECD buyers have largely shifted to open account trading, clients in Asia traditionally use L/Cs, which she says means additional costs.

Fawcett reckons Standard Chartered's factoring arrangements on a portfolio basis may save time and money and would work out to be less expensive than financing trade transactions using conventional credit arrangements.

Resurgence

Factoring was provided by several financial institutions that either failed or were subsumed by other banks in the Asian crisis of 1997.

Other banks in the region now offering factoring services include Citigroup, Deutsche Bank and HSBC.

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