Abstract: A reliable and inexpensive source of finance represents the lifeblood of any business venture. Access to finance continues to be a primary obstacle to the existence and growth of SMEs. This study seeks to assess the opportunities and risks associated with providing factoring for SMEs in Ghana. It delves into the existing sources of external financing for SMEs, the receivable management strategies employed by SMEs and then examines the extent to which SMEs in Ghana will fulfil the requirements for factoring. The research finds that out of the sampled SMEs, those in the manufacturing and distribution sectors presented a greater opportunity for factoring. It also revealed that the rather laid-back approach of SMEs to the management of their receivables presents a viable business opportunity for a factors’ account receivable management service to be provided.
Keywords: Factoring, Risk Mitigation, SMEs, Developing Economies.
Title: Factoring as a Mitigated Risk Alternative External Source of Finance for SMEs in Developing Economies
Author: Johannes Otoo, Ezer Osei Yeboah-Boateng
International Journal of Management and Commerce Innovations
ISSN 2348-7585 (Online)
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