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Factoring enable companies to improve cash flow and financial performance in the form of selling their account receivable at a discount to another company. The Factoring company advances money to the Factors Client and is, then responsible for collections. This facility is suitable for companies which require immediate access to cash, high growth and undercapitalized companies or seasonal businesses.

KMF provides Factoring facility with Recourse Basis. It means the client absorbs the risk of non-payment by the buyer. In the event of buyer default, the client is responsible for repayment.

Advantages of Factoring

  • KMF assess and establish credit limits for Debtors introduced by the Client
  • The Client signs the factoring contract and Introductory Letter which is sent to each Debtor to inform of the Client's decision to sell its receivables to KMF
  • The Client sells its receivables to KMF as they come into existence. Each Debtor is notified of the transfer of receivables
  • KMF credits the Client with the difference between the amount of receivables collected and the amount advanced(on net commission and agreed interests)
  • KMF will manage all aspects relating to debt administration.

Factoring Facility Scheme

1. Client(Seller) → Sale and Purchase Transation → Customer (Buyer)

2. Client(Seller) → Apply Factoring Facility → KMF

3. KMF → Factoring Invoice Confirmation → Customer (Buyer)

4. KMF → Disburse Factoring → Client (Seller)

5. Customer (Buyer) → Pay the Factored Receivables → KMF