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The Word FACTORING is composed by the root “FACTOR”, whose etymological origin comes from the verb “FACERE”, which means “TO DO”.
Thus, “FACTOR” was the person who “DID” the Roman business, or the Business Agent. The figure of the business agent has been known since the ancient civilizations to develop trading. Trade, at the time, was based on the exchanging of goods (escambo). Later, it began to mean the promise of delivering goods and the payment of them. Therefore, the exchange of goods (property and rights), which nowadays consists in one of the essential Factoring activities, has been practiced since early times.
Phoenicians, who were the most active trading people in the Mediterranean area, arrived at the Iberian Peninsula and in the VIII century B.C., established a commercial center called “Factoria”, where Portugal is located today.
The Phoenicians’ Factorias were meant to place their trade agents in the final market to develop trading and reducing credit risk.
In the same way, Romans, who conquered an enormous empire, used to assign a “Factor” in the conquered lands, as a trading consulting. This person would take care of all business aspects, such as: supplying commercial information, stocking goods, collecting receivables and so on. This person received a fee for the services rendered.
Services rendered in management business is another essential aspect in nowadays Factoring activity
Modern Factoring consists in rendering services and acquiring credit rights. It began in the United States in 1808, when a prosperous Factor, who rendered services to some textile industries began buying the credit rights on the industry sales.
Today, Factoring is practiced worldwide, mainly in Italy. In May 1988, Brazil took part on a diplomatic convention in Ottawa, in which 53 countries agreed with the discussed terms of Factoring.
In Brazil, Factoring began in 1982 when ANFAC – Associação Nacional de Factoring was established, presided since its origin by Mr. Luiz Lemos Leite, Brazil’s Central Bank ex-director and self taught in Factoring, who taught us almost all Factoring history mentioned above.
According to ANFAC data, the sector has used resources of R$ 18 bullion in 1997, assisting about 50,000 small and medium companies, giving 500 thousand direct and indirect jobs.
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