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SINGAPORE (Apr 5): CIMB likes IFS Capital, a financing institution catering mainly to small- and medium-sized enterprises (SMEs), given its opportunity to tap on a growing pool of SMEs with financing issues.

Citing a 2017 DP Information Group survey, analyst Colin Tan says: “Of the 35% that faced finance-related problems, around 81% experienced delays in payments from customers that increased cash flow risk and working capital problems. SMEs approach IFS for financing via factoring, whereby SMEs obtain immediate cash financing in exchange for giving up control over their accounts receivable, mainly to tide them over periods of tight cash flow related to working capital.”

In an unrated report on Thursday, Tan says this could benefit IFS Capital given how the Singapore market contributed to over half (57%) of the group’s FY17 operating revenue.