- 121 Finance has become India’s 1st NBFC (Non-Banking Financial Company) Factor. It is a Jaipur-based NBFC. Before this amendment, only big corporations could become factors.
- Factoring is the business of buying the receivables from a firm and servicing it at a discount to earn a profit. Here the buyer is not under an immediate obligation to pay the amount. His Bill is rather purchased by a Factor, who would service the bill at a discount to the seller company.
- This helps in the recovery of the nonpayment of dues. This is based on Risk Management and involves negotiations to reach an amicable solution. Also, there is no need for any collateral in factoring.
Question:
Q.1 Which has become the first NBFC to enter the Factoring Business in India?a. 121 Finance
b. HDB Financial Services
c. Ergo Solutions
d. AMex Capital
