IDEAS home Printed from https://ideas.repec.org/a/tuz/journl/v14y2016i2p14-32.html
   My bibliography  Save this article

Influence Of Financing By Factoring On Company’S Liquidity In Bosnia And Herzegovina

Author

Listed:
  • Emira Kozarevic

    (Associate Professor Faculty of Economics, University of Tuzla Univerzitetska 8, 75000 Tuzla, BiH)

  • Mirela Hodzic

    (Financial Manager, Neodent doo, Branislava Nusica 5A, 75000, Tuzla, BiH)

Abstract

The economic crisis, which did not leave Bosnia and Herzegovina (BiH) unaffected, and the increasingly present problems with the collection of accounts receivable made the companies in BiH turn to factoring, a modern financial tool that provides liquidity. Very frequently, slow collection of claims may be a problem, especially for small and medium-sized enterprises that have difficulties in accessing short-term loans and in providing collateral for loans and often face the problems of financing liquid capital. Due to all this, factoring is a high-quality instrument for "extinguishing" illiquidity as by cession of claims the company obtains cash in a very short period. This paper aims to establish the importance of factoring as a modern financing tool in keeping liquidity, competitiveness, and export capacities of small and medium-sized enterprises in BiH and to indicate advantages and disadvantages of factoring as a modern form of financing compared to traditional financing forms. Financing by factoring is directly related to the subjects in factoring activities, factoring item as well as to the costs, elements, and risks of factoring. It is therefore very important to accentuate the differences between financing by factoring and by short-term loans.

Suggested Citation

  • Emira Kozarevic & Mirela Hodzic, 2016. "Influence Of Financing By Factoring On Company’S Liquidity In Bosnia And Herzegovina," Economic Review: Journal of Economics and Business, University of Tuzla, Faculty of Economics, vol. 14(2), pages 18-32, November.
    • Handle: RePEc:tuz:journl:v:14:y:2016:i:2:p:14-32
    as

    Download full text from publisher

    File URL: http://ef.untz.ba/wp-content/uploads/2017/03/ER_November_2016_2.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Bogdan, Sinisa & Baresa, Suzana & Ivanovic, Sasa, 2010. "Portfolio Analysis Based On The Example Of Zagreb Stock Exchange," UTMS Journal of Economics, University of Tourism and Management, Skopje, Macedonia, vol. 1(1), pages 39-52.
    2. Klapper, Leora, 2006. "The role of factoring for financing small and medium enterprises," Journal of Banking & Finance, Elsevier, vol. 30(11), pages 3111-3130, November.
    3. Marko Miletic & Domagoja Buljan Barbaca, 2015. "Determinants Of The Amount Of Banks' Loans To Non-Financial Corporations In The Republic Of Croatia," Economy of eastern Croatia yesterday, today, tommorow, Josip Juraj Strossmayer University of Osijek, Faculty of Economics, Croatia, vol. 4, pages 741-748.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ivanovic, Sasa & Baresa, Suzana & Sinisa, Bogdan, 2011. "Factoring: Alternative Model Of Financing," UTMS Journal of Economics, University of Tourism and Management, Skopje, Macedonia, vol. 2(2), pages 189-206.
    2. Jiao Wang & Lima Zhao & Arnd Huchzermeier, 2021. "Operations‐Finance Interface in Risk Management: Research Evolution and Opportunities," Production and Operations Management, Production and Operations Management Society, vol. 30(2), pages 355-389, February.
    3. Joshua Mwakujonga, 2015. "The Influence of Creditor Rights and Contract Enforcement on the Levels of Factor Financing," International Journal of Financial Economics, Research Academy of Social Sciences, vol. 4(2), pages 85-91.
    4. Mou, W.M. & Wong, W.-K. & McAleer, M.J., 2018. "Financial Credit Risk and Core Enterprise Supply Chains," Econometric Institute Research Papers EI2018-27, Erasmus University Rotterdam, Erasmus School of Economics (ESE), Econometric Institute.
    5. Udell, Gregory F., 2008. "What's in a relationship The case of commercial lending," Business Horizons, Elsevier, vol. 51(2), pages 93-103.
    6. Wuttke, David A. & Blome, Constantin & Henke, Michael, 2013. "Focusing the financial flow of supply chains: An empirical investigation of financial supply chain management," International Journal of Production Economics, Elsevier, vol. 145(2), pages 773-789.
    7. Kangning Zheng & Zuopeng Zhang & Jeffrey Gauthier, 2022. "RETRACTED ARTICLE: Blockchain-based intelligent contract for factoring business in supply chains," Annals of Operations Research, Springer, vol. 308(1), pages 777-797, January.
    8. Dekkers, Rob & de Boer, Ronald & Gelsomino, Luca Mattia & de Goeij, Christiaan & Steeman, Michiel & Zhou, Qijun & Sinclair, Scott & Souter, Victoria, 2020. "Evaluating theoretical conceptualisations for supply chain and finance integration: A Scottish focus group," International Journal of Production Economics, Elsevier, vol. 220(C).
    9. World Bank, 2006. "Mauritius : From Preferences to Global Competitiveness, Report of the Aid for Trade Mission," World Bank Publications - Reports 8171, The World Bank Group.
    10. G. V. Satya Sekhar, 2018. "Measuring Models and Trends in International Factoring: 2009-2018," Journal of Applied Management and Investments, Department of Business Administration and Corporate Security, International Humanitarian University, vol. 7(4), pages 236-245, November.
    11. Jain, Richa & Reindorp, Matthew & Chockalingam, Arun, 2023. "Buyer-backed purchase-order financing for SME supplier with uncertain yield," European Journal of Operational Research, Elsevier, vol. 307(2), pages 758-772.
    12. Xu, Nana & Yuan, Yan & Rong, Zhao, 2022. "Depressed access to formal finance and the use of credit card debt in Chinese SMEs," China Economic Review, Elsevier, vol. 72(C).
    13. World Bank, 2007. "Colombia : Bank Financing to Small- and Medium-Sized Enterprises (SMEs) in Colombia," World Bank Publications - Reports 7654, The World Bank Group.
    14. Dorfleitner, Gregor & Rad, Jacqueline & Weber, Martina, 2017. "Pricing in the online invoice trading market: First empirical evidence," Economics Letters, Elsevier, vol. 161(C), pages 56-61.
    15. Auboin, Marc & Smythe, Harry & Teh, Robert, 2016. "Supply chain finance and SMEs: Evidence from international factoring data," WTO Staff Working Papers ERSD-2016-04, World Trade Organization (WTO), Economic Research and Statistics Division.
    16. Tunay I. Tunca & Weiming Zhu, 2018. "Buyer Intermediation in Supplier Finance," Management Science, INFORMS, vol. 64(12), pages 5631-5650, December.
    17. Kui-Wai Li, 2018. "Analyzing The Tfp Performance Of Chinese Industrial Enterprises," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 63(05), pages 1263-1284, December.
    18. World Bank, 2010. "Scaling-Up SME Access to Financial Services," World Bank Publications - Reports 12515, The World Bank Group.
    19. Panos Kouvelis & Fasheng Xu, 2021. "A Supply Chain Theory of Factoring and Reverse Factoring," Management Science, INFORMS, vol. 67(10), pages 6071-6088, October.
    20. Ferri, Giovanni & Murro, Pierluigi, 2015. "Do firm–bank ‘odd couples’ exacerbate credit rationing?," Journal of Financial Intermediation, Elsevier, vol. 24(2), pages 231-251.

    More about this item

    Keywords

    small/medium-sized company; short-term business financing;

    JEL classification:

    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • G39 - Financial Economics - - Corporate Finance and Governance - - - Other

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:tuz:journl:v:14:y:2016:i:2:p:14-32. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Senad Celikovic (email available below). General contact details of provider: https://edirc.repec.org/data/efutzba.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.