General Incorporated Association Online Factoring Association Established “Online Factoring Association”
– Selected as the first subsidized project by the Tokyo Metropolitan Government in Japan. Aiming for healthy market development by formulating voluntary guidelines
On October 31, 2022, we are pleased to inform you that the Online Factoring Association (abbreviation: OFA, name: Ofa) was established and has been selected as a target organization for subsidized projects by the Tokyo Metropolitan Government.
Purpose and background of establishment of OFA
More than 80%* of domestic business operators are SMEs, and these business operators that support the Japanese economy are easily affected by commercial distribution, and many of them are struggling with cash flow.
*Based on the “Basic Survey of Small and Medium Enterprises” announced by the Small and Medium Enterprise Agency in July 2022
In recent years, “alternative finance”, a complementary financial method that utilizes information technology, has been attracting attention as a new financing method for SMEs. Factoring is one of the financing methods other than loans using the accounts receivable of a company. In particular, many small corporations and sole proprietors have been hit hard by the corona crisis, and they are using online factoring as a means of raising funds other than loans. It is expected that the use of these funds will increase as a means of financing that is complementary to borrowing from financial institutions.
(“Changes in the number of companies that provide online factoring and the number of financial institutions that have entered the market through partnerships,” November 2022 OFA survey)
On the other hand, partly because there is no business law related to factoring, it is relatively easy to enter the market, and there are many operators. The situation is said to be a mixture of stones, such as the existence of loose “disguised factoring”. We have heard voices of anxiety from service users, such as “I don’t know which business operator is safe” and “Factoring in general has a scary impression.” In order to create an environment where users can feel secure and to develop the factoring market soundly, it is essential to develop industry guidelines and conduct publicity and awareness-raising activities for accurate information.
Against this background, major companies that provide online factoring services in Japan voluntarily gathered and in March 2020, the “Online Factoring Business Liaison Council (former OFA)” was established to promote a healthy factoring market. We have started activities as a voluntary organization in order to collaborate for further
development. In July 2020, we have led the improvement of the environment for users, such as enacting “Efforts for safe use”. And this time, in order to further strengthen the voluntary activities of the industry as a whole, the former OFA was converted into a general incorporated association on October 14, 2022, and the name was changed to “General Incorporated Association Online Factoring Association”. At the same time, in response to being selected as a subsidized business by the Tokyo Bureau of Industrial and Labor Affairs as an industry group, we will work on the formulation of voluntary guidelines and promote the development of an environment where small and medium-sized enterprises can raise funds with peace of mind.
In addition, from the viewpoint of the progress of IT and the reduction of infection risk, it is believed that “online” transactions will become mainstream in the factoring market in the future. With that expectation in mind, we added the word “online type” to the name of the association. Of course, “offline type” transactions are also being conducted at the moment, so the association is working to further improve the overall health of the market by having healthy “offline type” businesses join as members. To go.
・Collaboration among business operators and collection of opinions from the industry for sound market development
・Interacting and exchanging opinions with relevant organizations including financial authorities
・Development of voluntary guidelines based on the above
・Awareness-raising activities for factoring companies and calling for participation in OFA
・ Guidance on compliance with voluntary guidelines for member companies ・Awareness-raising activities for users (disclosure of information on sound businesses on the official website, etc.), etc.
・Formulation of voluntary guidelines, renewal of official website, etc. ・ Guidance based on voluntary guidelines for member companies, strengthening of management systems, etc.
Comments from the OFA representative director (in alphabetical order) ◆ Money Forward Kessai Co., Ltd. Chairman Akira Ieda
Through various activities of the Online Factoring Association, we will sincerely work to develop the factoring market in a healthy manner and promote recognition as one of the financing methods that small and medium-sized businesses in Japan can use with peace of mind. I have the will.
◆ OLTA Co., Ltd. Executive Vice President and CSO Shuichi Takeda [Image 4
Through dialogue with stakeholders, including relevant ministries and agencies, local governments, financial institutions, and existing businesses, we will explore the ideal factoring market and business for Japan. As a result, we hope to contribute to the development of an environment where small and medium-sized businesses can use factoring with peace of mind.
Messages of support from related parties (in alphabetical order) ◆ Mr. Takao Ochi, Member of the House of Representatives
Congratulations on the establishment of OFA.
Based on my experience in banking practice and from the perspective of financial administration, I believe that online factoring and other forms of factoring are very useful for small and medium-sized enterprises and sole proprietors who need new means of raising funds during the COVID-19 crisis. .
As the use of financial institutions as complementary finance is gaining momentum, I sincerely hope that OFA will receive subsidies from the Tokyo Metropolitan Government and contribute to the development of a healthy market, such as the development of voluntary industry rules.
◆ Member of the House of Representatives Mr. Junichi Kanda
I would like to congratulate you on the establishment of the Online Factoring Association of Japan.
Factoring, including the online type, is a means of raising funds by selling accounts receivable to a factoring company, but it is very useful for small and medium-sized businesses who are having trouble with cash flow.
In recent years, factoring has been attracting attention, as evidenced by the progress in collaboration between factoring companies and financial institutions. I feel that the fact that everyone has been leading this industry with passion and integrity has contributed greatly.
I sincerely hope that the factoring market will increase in size and depth in a healthy manner by leading the association and developing voluntary guidelines for the industry, which will eventually lead to smoother cash flow for small and medium-sized businesses. doing. ◆ Mr. Masaaki Taira, member of the House of Representatives
Congratulations on the establishment of the Online Factoring Association of Japan. Based on my experience running a fruit and vegetable intermediate wholesale business, I recognize the importance of allowing small and medium-sized enterprises to use factoring with peace of mind. With the support of the Tokyo Metropolitan Government, we hope to contribute to the sound development of the industry through enlightenment activities and the formulation of voluntary industry rules.
◆Ministry of Economy, Trade and Industry, Small and Medium Enterprise Agency – Expected to contribute to improving the business environment for SMEs – Many SMEs are faced with a constantly changing business environment, including the recent surge in prices. is the central issue.
The Ministry of Economy, Trade and Industry and the Small and Medium Enterprise Agency have been working to optimize contract conditions and improve payment conditions, including the abolition of promissory notes. We also recognize the importance of providing reliable services.
In order to provide high-quality factoring services that can be used at low cost, can be quickly converted into cash, and are available for small and medium-sized enterprises, we will take the opportunity of the establishment of the “Online Factoring Association” to promote the business world. I hope that voluntary efforts will be accelerated. Participating companies (in alphabetical order)
・H.I.F. Co., Ltd.
・OLTA Co., Ltd.
・GMO Creators Network, Inc.
・GMO Payment Gateway, Inc.
・Paytner Co., Ltd.
・Money Forward Kessai Co., Ltd.
・Labor Co., Ltd.
Commencement of admission procedure
We will inform you about the timing of starting the enrollment procedures for the Online Factoring Association (OFA) on the OFA website (https://j-ofa.org/) when various preparations are complete. General Incorporated Association Online Factoring Association Overview Name: Online Factoring Association of Japan
English name: Japan Online Factoring Association
Date of establishment: October 14, 2022
Representative Director (in alphabetical order): Akira Ieda / Shuichi Takeda Auditor: Takahiro Ogawa (Mori Hamada & Matsumoto Law Office) Location: DENSAN Building G-14015, 8-10-5 Ginza, Chuo-ku, Tokyo 104-0061 URL: https://j-ofa.org/
Details about this release: