Letters to the Director: Making electronic factoring universally accessible

In Chile, the economic media outlets Pulso and Diario Financiero published the letter to the Director that the CEO of Signature South Consulting, Mario Fernández, sent to said media outlets. The following is the letter:

“A few days ago, we approvingly saw the 22 measures announced by the Finance Minister, Rodrigo Valdés. One of them establishes a deadline for the reception acknowledgement report for the copy of the invoice, after which it shall be deemed irrevocably transferable, thereby making the access to financing easier for MSMEs. Through the term “transferable,” the intension to make factoring available to all is implicitly expressed, which pleasantly surprises us, since it has not been common in Chile for the economic authorities to so favorably express their approval of this as a financing mechanism.

Although “[establishing] a deadline for the reception acknowledgement report” may not be the primary focus of this media outlet, establishing technological mechanisms by the SII so that millions of reports acknowledging the reception of electronic invoices generated per month are digitally registered online and available so that all factoring entities in the market can securely access this information.

At the end of the previous government, a series of measures propelled by the ex Finance Minister, Felipe Larraín, were approved to make electronic invoicing available to all. Unfortunately, in the technological implementation of these measures the positive impact that their application would have on the economy was not well measured, and currently millions of electronic reception acknowledgement report are generated, which are not available to the financial entities specialized in the factoring business, making it nearly impossible to take advantage of this financing for SMEs.

Today, more than 200,000 companies invoice electronically in Chile (60% of invoices issued in the country). However, only 13,000 of these use factoring, which is difficult to explain, given that it has to do with SMEs or microenterprises that sell products and services to large and medium companies, for which factoring would definitely be the best financing mechanism imaginable. In conclusion, the government has set off to a fairly good start with these measures, and our recommendation would be, in the case of financing for SMEs, not to try to define new initiatives, but rather to improve the implementation of those that are already well regulated.”

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