The MHP agroholding and agricultural machinery dealer LLC “ABA “ASTRA” have been cooperating for over 15 years. And over these years, the companies have accomplished a great deal together. MHP staff gained valuable experience growing various crops in Hungary. Hungarian farmers visited Ukraine, in particular the MHP agroholding’s branches, to see how work is organized across more than 370,000 ha. They took part together in the Fendt Go to East project, the agroholding’s operators competed in “AstraShow,” and “ASTRA” staff help organize and run “TractorFest” events.

Over these 15 years, MHP has bought over 100 Fendt tractors, which means this agroholding runs the largest fleet of Fendt tractors in Eastern Europe!

To keep these tractors running well, “ASTRA” and MHP signed a contract three years ago for supplying genuine spare parts and service. Under the contract’s terms, “ASTRA” grants payment deferrals on delivered spare parts, and finances these deferrals itself. This year, the agroholding approached the supplier with a request to increase the deferral period. “ASTRA” and MHP specialists looked into the issue and found a solution. They turned to a trusted partner in financial services – OTP Bank, which offered them factoring.

Factoring – the assignment by the Supplier to OTP Bank (the Factor) of the right to a monetary claim against the Buyer for previously delivered goods / performed work / rendered services.

Factoring is a unique product that helps solve a whole range of economic and financial tasks, and also substantially helps a potential customer (the Supplier) gain market traction and establish itself.

The factoring scheme

  1. The Supplier delivers goods / performs work / renders services.
  2. The Factor (OTP Bank) buys the Supplier’s accounts receivable at a discount (provides financing).
  3. When payment falls due, the Buyer makes payment to OTP Bank (the Factor).
  4. OTP Bank (the Factor) transfers the difference between the amount of the fulfilled claim and the financing provided.

Benefits of factoring for the Supplier (Customer):

  • the ability to finance working capital without collateral;
  • faster fund turnover;
  • the ability to offer Buyers better payment terms;
  • a larger pool of potential Buyers;
  • a substantial increase in sales volumes.

Benefits of factoring for Buyers:

  • receiving goods / work / services from the Supplier with deferred payment (a trade credit)
  • increased purchase volumes without raising additional capital

This is another good example of solving a problem in a way where every party comes out ahead!