Factoring, support for the real economy


BNP Factor corporate booklet, 1996 - BNP Paribas Historical Archives

The first evidence of factoring is to be found in the fifteenth century in France and in England. But it was not until the 1960s that this technique for recovering debt really developed in France. It has since been widely deployed due to the action of the banks and in particular BNP Paribas, a major player in Europe.


Factoring: A long-standing technique

The word factoring originates in Latin facere, which means “to do”. The factor refers to the person who “does something on behalf of someone”. This activity was first practised in England and in France, in the fifteenth century. Jacques Cœur (1395/1400-1456), a wealthy French merchant and banker traded in the Mediterranean area as far as the Middle East. To develop his business, he relied on an extensive network of factors. Initially, their mission was to sell goods on behalf of producers.

But it was in the United States that this technique truly developed, from the 17th to the 19th centuries, thereby facilitating transatlantic trade with England. At the end of the 19th century, the factor became “factoring” – the suffix signifying the appropriation of the activity by the American factors. The financial aspect was imposed on the depositary role: Factoring refers to the purchase of a company’s debts, which provides it with the cash needed to continue trading. A triangular relationship is established between the factor who buys the credit, the seller (the factor’s customer) and the buyer (the seller’s customer). Although factoring grew in the United States, it often remained limited to financing the textile industry. In the 20th century, the American factors saw the need to develop their activity in Europe. In fact, the creation of the European Community of Coal and Steel (ECSC) in 1951 contributed to an expansion of trade. This market offered a wealth of opportunities and the American factors intended to take their place in it.


The Turning Point of the 1960s

From the 1960s onwards, the factoring players gradually took hold in Europe. At the initiative of the First National Bank of Boston, International Factors Ltd was founded in 1961 in England, its first logical base in Europe. In 1963, the holding company, International Factors AG was set up in Switzerland. Ifitalia, the first Italian factoring company was created in 1963 by the Banca Nazionale del Lavoro (BNL). In France, two pioneering companies entered the market: the Société Française de Factoring (1964) and Factofrance Heller (1966). In Belgium, KEFAM (Kempische Factormaatschappij) was founded in 1965: Renamed Belgo-Factor in 1974, it now is BNP Paribas Fortis Factor.
But the financial technique was still associated with firms in difficulty. This negative connotation inhibited the growth of factoring in France and in Italy, where people remained attached to conventional forms of short-term funding, distributed by the commercial banks.

The change occurred in the 1970s: The major French banks gradually became more interested in it and saw its potential as a product dedicated to businesses. Because besides buying credit, the factoring company manages the customer’s accounts and is responsible for recovering debts. To tap into this new market, the banks created subsidiaries or specialised departments.

A linguistic sign of the activity being honoured, the French term, “affacturage”, meaning factoring, was created by the Decree of 29 November 1973. Accepted into the French language, the process developed throughout the European market. A regulatory framework was gradually set up in France, with the Dailly Act of 1981 which lays down a legal basis for factoring operations and then with the Banking Act of 24 January 1984. This technique finally became a banking activity, officially.


The Growth of Factoring

If factoring has managed to impose itself in Europe, it is by demonstrating its adaptability. The particular services offered tend to be well suited to the needs of businesses. The adoption by the banks of the technique has been a key element of its success. In the 1980s, factoring contracts recorded strong growth. In France, the market was dominated by subsidiaries of the main banking groups, whose involvement grew steadily.



Universal Factoring corporate booklet, factoring subsidiary which joined BNP Group in 1982 – BNP Paribas Historical Archives


91.9% of factors are now banks whereas independent companies account for just 8.1% of them.
Since 2005, France has been ranked in second place in Europe in the factoring market and third at globally since 2008. Because the financial crisis of 2008 has contributed to the expansion of the factor, now recognised as an active support for businesses. Factoring has found its place.


Head office of BNP Paribas Factor at Rueil Malmaison (France)

Head office of BNP Paribas Factor at Rueil-Malmaison – Archives historiques BNP Paribas

To go further :

Patrick de Villepin, La success story du factoring, Association pour l’histoire et la promotion du factoring, 2015, Paris



Contact us / Send us a document

    This website has a cultural and historical purpose; it is not intended to deal with trade and banking relationship issues which will not be processed. See moreless

    If you have a document, a photo, a story about BNP Paribas history and want to share it, please do not hesitate to share it there.

    In transmitting this document, you certify to own it and to hold the property rights needed for their use. You authorize BNP Paribas to use it on the website Source of History.

    Thank you for indicate the origin of the documents and give us any information you consider relevant to its understanding.

    The personal data collected on this form is processed by BNP Paribas SA for processing. It allows us to provide a personalised answer to your requests (access to archives, research, information requests. Please note that fields identified by an asterisk (*) are mandatory.

    For more information on the processing of your personal data, you can access our Data Protection Notice.


    Suscribe to Well of History's newsletter

    The personal data collected from the Site are subject to data processing by BNP Paribas to enable access to and use of the functionalities offered by the Site www.histoire.bnpparibas.
    Pursuant to the French Data Protection Law No. 78-17 of 6 January 1978, you are entitled to access the data collected by BNP Paribas and to have it amended, updated or deleted, where such information is incorrect, incomplete or outdated. You can exercise this right by contacting: BNP Paribas – APAC TDC Val de Marne, TSA 30233- 94729 FONTENAY SOUS BOIS Cedex.


    Files download

    I undertake to make private use of the contents downloaded from the website


    You have added an item to your selection.

    You can find your saved contents in the “My space” section, which can be accessed at the top right of any page of the website.

    My space English A+ A-

    To find this content on your next visit, you need to create an account from this section, by clicking on:

    Fermer Welcome to

    Well of History

    Since 1822, history has made us a key player and a witness of transformations taking place in society and economy in Europe and around the world. We invite you to share in our story and explore our archives to learn more about our constantly changing world.
    Jean Lemierre Jean Lemierre,
    of BNP Paribas