The Role of Factoring for Financing Small and Medium Enterprises

@inproceedings{Klapper2005TheRO,
  title={The Role of Factoring for Financing Small and Medium Enterprises},
  author={Leora F. Klapper},
  year={2005}
}
Factoring is explicitly linked to the value of a supplier’s accounts receivable and receivables are sold, rather than collateralized, and factored receivables are not part of the estate of a bankrupt firm. Therefore, factoring may allow a high-risk supplier to transfer its credit risk to higher quality buyers. Empirical tests find that factoring is larger in countries with greater economic development and growth and developed credit information bureaus. “Reverse factoring” may mitigate the… CONTINUE READING
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