favorable solutions for businesses. This funding ... Third hypothesis (H3): Are the new firms, which have 1-5 years .... CHAPTER 1 CONCEPTS AND DEVELOPMENT ... Factoring is a financial transaction where a business sells its ...... International Accounting and Financial Reporting ... _4082_1.pdf Tabelë 4. Kredia brenda ...
! " # " # $ % & & '
&
! ( ) * + , - ) ( . &
! " #
$ % & ' ()$
# # )(*+,$
-. / 0 1 2+(3 4 5'6 7
4 2+(3 " #
$ % & ' # # 2+(3
FACTORING AS A FINANCIAL ALTERNATIVE (Albania end Kosovo case )
Prof. Assoc. Dr. Gazmend Nure
© Copyright Prof. Assoc. Dr. Gazmend (Gezim) Nure, The content of this article is totally authentic. All rights reserved.
ϭ
Abstrakt Successful
business
practice
needs
continued
resources of financial resources. Among many other methods, businesses have begun to use factoring as a financing method. Factoring, as a special financing method, is practiced in practice by factoring contracts. Contacted factoring is a legal transaction based on the duty institute according to which the creditor assigns its receivables to the factor (specialized companies in general). Factoring has some common functions, the first and most important of these functions is the financing function (from suppliers). Other factoring functions as; advance payment, book keeping, regarding claims, claim collection, protection against payment failures are also very important. The trading practice has developed numerous forms of factoring deals. Current economic conditions, characterized by credit constraints, make factoring one of the most favorable solutions for businesses. This funding method is one of the ways it takes a short time to
Ϯ
negotiate and one of the easiest ways to secure working capital funds, which is one of the most sensitive points for small and medium-sized enterprises. Although it is a well-known financing approach that in Roman times, factorization is still regarded as one of the newest and least popular funding methods that is expanding recently in the former communist countries, including Albania and Kosovo.
Keywords: factoring; econometric
modeling,
Contract suppliers,
factoring; short-term
assignment.
ϯ
Introduction
The financial crisis showed best the reason for the development of the factoring industry, as many banks, despite having secured their collateral loans, were faced with the difficulties of liquidity shortages. With the globalization of the
world
developments
economy in
the
there
were
competitiveness
new of
businesses that are developing international trade, making the source of funding more and more emphasized in the moments when the discussions about contract deals are made. Being a relationship between countries and people of different cultures, the barriers of language and customs, make the creation of many conventions and one of them is UNIDROIT, which regulates the international relations of the factoring industry. This convention was compiled in Ottawa in 1988 and best adapted in 2001, in New York, under the UNCITRAL international contract.The reasons why I chose the treatment of factoring as a way of funding are:
ϲ
1. To show to Albanian businesses that factoring is a way that does not take much time to ensure liquidity, easy to apply and very effective to improve their cash flow, but always paying a higher cost higher than any other way of lending,
if
the
need
for
liquidity
continues for a long period of time.
2. Factoring
is
an
industry
that
is
increasingly being used by SMEs. This is also shown by the statistics of different countries that report an increase in the factoring market for 2011.
3. Factoring companies work to take care of debts on behalf of businesses. For most businesses they compile tight budgets from period to period and should collect debts reliably as much as possible.
4. The factoring company takes over the debt
collection,
but
unlike
debt
collectors, they allow the business to borrow on the basis of their debt by
ϳ
withdrawing money from the company's factoring money. But for this attraction, businesses pay the company factoring both for the debts collected and for the use of the factoring company's funds.
Objectives and Objectives of the Study The purpose of this study is to prove that the factoring industry, being a new industry, is spreading all over the world, is indispensable for new SMEs in the market as one of the most effective sources of financing the needs of their working capital.To achieve this goal we have defined the following objectives:
a. Separation of a factoring contract as well as analysis of the relationship between the participating parties.
b. Analysis of stakeholder interests in factoring.
c. Comparison
between
factoring
and
collection of debts.
d. Analysis of the types of risks faced by the factoring
company
and
their
way
of ϴ
managing them.
e. Analysis of the impact of this funding on the cash flow of enterprises which are in liquidity difficulties.
f. Calculation of costs of this funding model and comparison with other short-term financing methods. g. Calculating the expected annual return. h. Export factor analysis. i. Analysis of legal factors affecting factoring.
The hypothesis of the study The study undertakes to confront and validate the following hypotheses, which constitute the core of it.
First hypothesis (H1): Are businesses using factoring
small
and
medium
businesses,
comparing them from annual turnover? Second Hypothesis (H2): Does the factoring service tend to be more focused on production and distribution firms?
ϵ
Third hypothesis (H3): Are the new firms, which have 1-5 years operating in the market, more inclined to use factoring? Fourth hypothesis (H4): SMEs that have an "aggressive" increase are more inclined to use factoring? The five hypothesis (H5): Is the likelihood of using factoring from SMEs higher when their debt level rises and the possibility of borrowing from banks falls? Sixth hypothesis (H6): Is the likelihood of using the highest factoring for SMEs that result with low current ratio values?
Research Methodology In accordance with the purpose of the study, a detailed analysis of the factoring industry in Albania and Kosovo has been done based on statistical data. To see how parametric changes will affect the factoring business, an actuarial model is used. Also, statistical data processing
ϭϬ
methods help us to determine the degree of impact of demographic factors, firm growth and liquidity factors, on the performance of factoring business.Studies on the factoring industry in our country are limited. World Literature is very rich in studies and articles on financial factoring. We have tried to use all the literature, especially those related to countries similar to Albania and Kosovo, not only with the former communist countries but also with the main countries with which Albania has economic relations. The research focused on recognizing the concept of factoring, allowing the use of some research methods such as: Analysis of the documentation that refers to specific literature related to phasing through reading. This method allows to analyze but also compare the development of this industry to the spatial and spatial extent. The literature used is obtained from official websites of the World Bank, EBRD, FCI factoring chain, and also the reports published by the Bank of Albania. Active observation focusing on the observation of the constituent elements of factoring as well as the
ϭϭ
factors that positively or negatively affect the industry. Through the questionnaires conducted for the two categories of participants in this industry (the
customer
category
and
the
factoring
company's), the factors that prompted you to think that factorization is a fast and easy financing tool, but at a higher cost than all other methods. In the study open questionnaires
were
used
where
respondents are likely to respond as yes or no, but also
with information ranges.
The
factoring
companies operating in Albania used the direct interview method, where the questions were direct in the form of a conversation. But the key information to analyze the factors influencing the use of factoring is taken from the SME Financial Statements that used factoring.
Comparative method, through which the elements are theoretically identified and compared to the virtually discrete elements in different dimensions of the factoring concept and then compared and differentiated if any. This study analyzes the data between countries in the region and the world, by clearly explaining how factorization varies in different countries, which is the space dimension as well as in different periods of human development,
ϭϮ
showing factoring in the time dimension.
The use of assessment
techniques helps in
determining the manner of collecting and processing information and then in its interpretation. All of these lead to the definition of a more accurate and convenient concept of factoring, the elaboration of world-wide charters for statistics related to this industry, as well as the accurate assessment of key variables to be considered in the study.Another aspect in this study is its factoring and legal environment. Factoring is a source of funding linking to a three-party relationship that is definitely governed by the contract. This contract must definitely find itself regulated by a set of laws that operate in the environment where the factoring itself operates. Basic laws are the domestic law on factoring
and
the
conventions
for
exporting
factoring. These are the elements of the contract that must be studied so that all three parties are equally protected before any potential problems.
ϭϯ
Problem constraints It should be noted that the work itself contains some limitations:
First, like any model of simulation in our model results depend too much by the nature and quality of the data and by a series of assumptions that are used in the simulations. The data were mainly source of SMEs, non-bank private factoring companies and the Bank of Albania.
Secondly, in the quantitative analysis, the only 26observation series is very small and can influence the conclusion. But since the degree of errors in the quantitative analysis results are of the order of magnitude, they are considered acceptable mistakes that do not infringe the conclusions of the analysis. For this reason, the results of the model should be looked at more qualitatively than quantitatively. We think that these results, which are approximate but not very accurate, reveal who are the factors that affect the factoring business.
ϭϰ
CHAPTER 1 CONCEPTS AND DEVELOPMENT OF FINANCING BY FACTORING
1.1 Determining the factoring concept Factoring is a financial transaction where a business sells its receivables (ie, invoices) to a third party (called a factor) at a discount in exchange for immediate money to finance ongoing business. Factoring differs from a bank loan in three main ways. First, the emphasis is placed on the recoverable amount (essentially a financial asset), not the creditworthiness of the firm. Second, factoring is not a loan - it is the purchase of a financial asset (receivable). Finally, a bank loan includes two parties, while factoring includes three. The three parties directly involved are the one who buys receivables, the debtor, and the factor. Receivable is basically a financial asset related to the debtor's liability to pay the debt money to the seller (usually for the work performed or the goods
ϭϱ
sold). The seller then sells one or more of its receipts (receivables) to a third-party discount, specialized financial organizations to get the money. The sale of accounts receivable basically transfers the ownership of accounts receivable to the factor, indicating the factor receives all rights and risks associated with accounts receivable. Therefore, the factor receives the right to receive payments made by the debtor on the amount of the bill and must bear the loss if the debtor does not pay the amount of the bill. Usually, the debtor's account is notified of the sale of receivables, and the factor of the debtor's bills and makes all the collections.Critical for a factoring transaction, the seller should not collect the payments made from the debtor's account, otherwise, the seller might potentially risk further breakthroughs by the factor. There are three main parts in the factoring transaction: a.) forward, a percentage of the nominal value of the invoice paid to the seller by filing, b.) The remainder of the remaining amount of the total invoice held up to the payment from the debtor's account is made c.) The tax, the cost associated with the transaction which is deducted from the first reserve shall be paid back to the seller.
ϭϲ
Factoring can be defined as "a contract by which the factor is to provide at least two of the services (finance, account keeping, collection of receivables and credit risk protection) and a factor-specific supplier on a basis continuous sale or security, accounts receivable arising from the sale of goods or the provision of services ". Unlike a traditional loan, factoring has not put the debt on the balance sheet and there is no loan to repay. By factoring, there is no need for credit or collection departments, and there is no need to spend your earnings on keeping accounts receivable. Factoring can be short-term or part of a continuous funding
program.
Factoring
provides
small
companies with the advantage of instant coinage that was previously available only to large companies with high sales volumes. New companies can benefit, though they do not have a demand for a long-term credit history. The main advantage of factoring of accounts receivable is that business is easier to secure instant liquidity through it than through bank lending
ϭϳ
1.2 History of factoring operations. Factoring is the oldest form of trading finance. Some scholars claim that the origins of factoring begin at the time of the Roman Empire where for the first time were sold letters of promise with discounts - and some others go even further away in the days of Humurab, four thousand years ago since the early beginnings of humanity. The term factor comes from the old Latin "facio", which means "the one who causes the action". As the verb in Latin also shows, the story of factoring is the story of agents who perform actions for others. At the center of these functions was the agent's role as a more opportunity for textiles sales. As a result of this activity, the factoring agent began to process other marketing and distribution functions, including availability of customer tastes advice, product demand,
and
storage
services,
so
textile
manufacturers could ship goods to agents , who would then pass these products to the final customer. The agents began to take on some other important functions to support the textile industry. They provided advice on the amount that producers could sell to potential customers with trust (accounts receivable). They guaranteed payments to textile
ϭϴ
manufacturers, taking full responsibility for the solvency of these consumers. To protect themselves, the agents created reserves to cover claims on defective goods and any disputes arising from those claims. Finally and equally important from a historical perspective, agents created advanced funds for textile dealers based on the sales values of these goods. So, in essence, factorization was fully reflected in the economic and financial element of factoring business as it existed 600 years ago. 1.3 Factoring Contract and its Forms Because it is a product of Anglo-Saxon practices, the factoring business is structured in accordance with the requirements of the "common law" system. Specific business concepts are more regulated based on practices that are characteristic of the "common law" legal system. While countries with civil code, which support legal institutions in the Roman legal system, must regulate business specifics of factoring with the existing civil code rules. In general, the biggest problem of countries with civil code on the issue of factoring business and its organization is the impossibility to determine the total and future provisions
ϭϵ
1.3.1 Participating Parties have a factoring contract Participants in a factoring relationship are: the supplier, the factoring company and the client. The relationship arises early between the supplier and the customer. The supplier delivers goods or services to the customer against a payment which is billed through the invoice. The payment terms agreed upon by the supplier with the client are different, where we can mention n / 30, n / 60 or n / 90. , As soon as the supplier sells the goods or carries out customer services, it may happen that the supplier has insufficient liquidity to continue its trading operation. Therefore, it is necessary to improve the operating cash flow as it must respect the terms of the agreement with the client, at this moment are required different ways of financing where, besides the commercial loans or the securities a way of financing is also with factoring. So the deal between the supplier and the factoring company arises. The Supplier shall provide all its receivables for which it is entering into a settlement agreement against a direct cash receipts in its bank accounts. The terms upon which they agree are subject to the contract concluded between the two
ϮϬ
Such a tripartite relationship is also shown in Figure 1.1 below:
1.4 Forms of contract factoring
The factoring service can be classified by factoring a basis the risk and the origin of the transaction. If a contract risk is taken, it is necessary to distinguish and define the different types of factoring product:
ϮϮ
Me baze riskun
¾
Me garanci
¾
Pa garanci
Faktoringu
Me baze origjine e transaksionit
¾
Vendas, per tregtine vendase
¾
Nderkombet are, per tregtim me vendet te ndryshme
Figure 1.2 Forms of Factoring Contract
1.4.1 Factoring with/without Factoring
Guaranteed commissioner
Factoring who
involves takes
a
factoring
responsibility
for
collecting their customers' debts, but reserves the right to demand a complete alternative from the supplier for any bad debt.
Ϯϯ
Supplier
Connection
-
Client
-
Factoring
Commissioner is established.
Step 2: Upon receipt of a copy of the invoice from the factoring commissioner, the related debt is signed by himself, according to the factoring agreement. At the same time, the commissioner activates a credit line (normally up to 80% of the invoice value) against which the Supplier may choose to immediately withdraw a prepayment. Factoring Commissioner usually provides funding within one day of receipt of the Supplier's invoice.
Step 3: The client pays the full value of the invoice to the factoring commissioner within the deadline. In cases where there is a surplus from the payment period to an "undisputed" invoice, then the factoring commissioner starts the process of debt collection from the Client. In the event of a continuous default, it is normally the factoring commissioner who proceeds with legal actions and closes the case against the Client. In the case of warranty factoring, the factoring commissioner has the option of the supplier of a bad debt not collected. The opposite is unmanageable factoring, where the commissioner of factoring predicts a loss. In some cases the loss can
Ϯϱ
be protected by the credit insurance officer, which is owned by the factoring commissioner.
Step 4: In the payment made by the client (or in the case of overdue payments from the agreed date) of the full amount of the invoice, the factoring commissioner credits the balance (minus the prepayment and commissions) to the Client's account. The factoring agreement with the supplier, in most cases, is based on Full Turnover (rather than on partial bills), and as such the factoring process is continuous. This is an important point and it means that factoring involves the customer sales account in the factoring commissioner's accounts.
1.5 Other Factoring Related Products
1.5.1 Receivable Accounts
A healthy cash flow is a very important point for a business. Many facts indicate that a healthy cash flow is more important than the creation and distribution of goods or services. Factoring turns accounts receivable immediately into liquidity. Factoring, buying receivables means exactly selling a receivable or discounted invoice of a company to a
Ϯϲ
b) Many small and medium-sized enterprises are likely to have little expertise in this area.
c)
Factoring
generates
wealth
data
on
the
performance of accounts payable.
1.5.3 Discounted invoices
In the case of factoring with warranty and without warranty,
the
inclusion
of
the
factoring
commissioner is normally in contact with the Client. However, most discount bills agreements are managed on a confidential basis, where the client is not aware of the involvement of the factoring commissioner. The discount billing process follows almost exactly that of factoring. However, as a confidential service, in the discounted invoice agreement the supplier follows payment from the customer directly when payment is made to a Trust account, which is kept under control by the factoring commissioner. As stated, the factoring of the discounted invoice is more a way of providing funding than factoring to provide professional services financing.
Ϯϵ
This is reflected in the typical size of suppliers that are available for each invoicing-factor invoicing service is more appropriate for medium and large suppliers, with sufficient resources to undertake a professional credit management function. While factorization is more valuable to small firms.
1.5.4 Purchase invoice for exchange An exchange purchase invoice is an unconditional form in addressing a person (supplier) address to another (buyer). It is endorsed by the person giving the (supplier), asking the person to whom it is directed (the buyer) to pay a fixed amount of time fixed in the future for a certain amount of money. Immediately, once signed by both parties, the invoice is classified and "received". Received bills can then be sold to another party at a discount, so they can collect the debt for the difference. This is exactly the same as the factoring process, in addition to the fact that the purchase bills for exchange are used as "legal remedies", unlike the use of a sales invoice. The invoice discount is the usual form of factoring in France, where it is estimated that 80% of all trade is with bill exchange (feature).
ϯϬ
1.5.5 Confirmation This is a type of financing where a financial board confirms the rules set by the buyer of the seller, financing more than the purchase accounts rather than the sales accounts. The financial board guarantees payments to the seller, offering the loan to the buyer. The system is used to provide stability to exporters. It was moreover developed in the UK in 1960 by factoring companies in order to offer another service to their clients to enable them to expand. Usually it is offered in cases when a factoring client receives a large order that he can not finance. Then, the factoring commissioner provides funds and covers the need for funding from the constant factoring obligation. This customer assisted system has been reduced when banks buy factoring companies but continue to be used by some small independent UK commissioners and is offered as a service in Spain. Neither exchange bills nor confirmations do not replace factoring. In the former case, it is merely that factoring is using bills of purchase instead of sales bills as a means, in the second case, the confirmation is used to finance more purchases than sales.
ϯϭ
CHAPTER 2 FACTORING, RISK, EXPORT AND ADVANTAGES
In this chapter we will consider the factoring factor's role as a short-term source of funding. Like any other business, factoring has its own risks, but there are also tools to manage this risk, which are described in the second chapter of the topic. As mentioned in all the above points, the factoring industry is taking on ever greater development due to the inadequate liquidity situation of companies or banks. We will see that Albanian exports have a growing trend for the period 2008-2014.Faktoringu , through its exportation creates advantages for the supplier, eliminating administrative and service costs will be much better once it is carried out by locals who know the client well enough
2.1 Factoring Risk
There are many people who want to live comfortably, without taking the risks that they excite in the money market. They prefer to deposit
ϯϮ
their savings on savings deposits or treasury bills where at the end of the period they are sure they will earn interest on these deposited amounts and will have safe money. This category of people can not undertake the creation of a factoring business as it itself carries the risk. People who think to cope with the risk of factoring business have different traits, from which the two extremes of risk are defined:
Faktoring Risk
People who know that if they invest in the money market, play a stock exchange or create businesses as factoring, they will carry the risk of losing money. But there are people who require a huge return from their investment. These guys like to make money
On the other side of the spectrum of risk faced in the factoring business, people who take over risk but are benevolent and seek to help their supplier. These people take on a tremendous risk because benefiting from their benevolence can benefit dishonest suppliers by deceiving
Figure 1.4 Factoring Risk
ϯϯ
1. Unpaid by the customer. A customer may not pay one or more invoices for many reasons: his supplier's disagreement on the quality of the product or service offered, lack of liquidity to pay at the right time, business closure or bankruptcy. Factoring commissioners, at the time of drafting the contracts, are very careful to
protect
themselves against this type of risk.
2. Poor business management of suppliers. A supplier who does not have good skills in managing his businesses can also cause a problem with the factoring company. If the supplier's service is poor, or the products are bad, they bring dissatisfaction with the customer, as a result he does not pay the bills. Incorrectly recorded bills are another problem stemming
from bad
business
management. Such a problem makes it very difficult to make the connection of a factoring
agreement.
So
factoring
companies, before concluding an agreement, clearly define the managerial skills of business administrators.
ϯϱ
3. Personal events. In his personal life the supplier may also have sudden events such as serious illness, divorce from spouses, death of a family member who affect the business of the supplier. But even in these cases, which are unexpected, since anyone in such events may experience such events, factoring commissioners try to minimize them by means of risk management.
4. Fraud. Fraud by the supplier is unpleasant but possible. Such frauds are different. One is receiving payments from the vendor himself in a timely manner that the factoring company is to receive, and the supplier does not pass the factoring company but keeps it for himself. Another fraud may be the sale of invoices that have not yet been fulfilled by the customer's terms, as a finished product without dispersion etc. Or another possible fraud is that the supplier instructs the client who is no longer in relationship with the
ϯϲ
factoring
company
and
therefore
the
payments have to pass the supplier again. Even when the supplier deceives that he owns a company and has unfunded clients, where there is no company or client, is a fraud that facings can be faced by factoring companies. 2.2 Risk Management Procedures
Factoring companies, sooner or later, will face the risk of loss during their business. But they try to reduce this risk as much as possible. They always keep in mind the fact that the opportunity to lose, especially large sums, increases dramatically when:
a) They finance large amounts of supplier bills,
b) Do not prepare a regular supplier analysis or do not use the appropriate legal documents to protect their investment.
ϯϳ
Thus, if a factoring company moves money into an uncertain hand, then it should not be surprised if it is lost. At present, there are many ways of managing risk, which can be used by every factoring company. The main ways that a risk factor management company can use is divided into five categories:
1. Setting the funding limits. The funding limits that a company factoring factor depends on the amount of funds it has and how tolerant it is to risk. These limits prevent the company from becoming overconcentrated. The funding limits determine the maximum monthly amounts that the company finances new suppliers, as well as the limit for each supplier.
2. Determine the industry that the company will finance with factoring. In fact, there are plenty of companies that need liquidity to continue operating in the market, but factoring companies do not have to risk their capital and waste time with all these companies. There are some of them that are more suitable to be financed by factoring.
ϯϴ
3. Carry out a good analysis of the supplier. The analysis should go through four stages: determining the desired supplier, defining the desired customer, determining whether the new bills are invoices that you want to fund and undertaking the appropriate actions to secure payments from the unpaid bills . All of this will make the factoring company more prudent when signing a contract with the supplier. 4. Creation and placement of reserves. The reason for creating reserves is simple. If a factoring company has receipts that are not liquidated in time, then it may use the reserve fund so that it does not affect its cash flow.
But all factoring companies, when they finance their businesses, need to design a list of policies they need to follow in order to minimize the risk of loss. This list will help a lot, especially when you are getting a new supplier, new customer, or new bills.
The factoring companies set funding limits by specifying:
ϯϵ
between the factoring commissioner and the exporters. The commissioner buys short-term receivables that the exporter will receive from a customer outside his home country, against a sum of money lower than the value in the books of accounts receivable, normally without any conditions, assuming the foreign customer's insolvency risk and organizes the collection of payments made by the foreign client. Exporting the factoring offers all the facilities offered in the domestic field, even more. From the supplier's point of view, the factoring system will function in the same way as domestic factoring or export, while companies that export supplier accounts will spend more than using the factoring service for domestic services. If we make a quick comparison between domestic factoring and exported we will see that there are some small differences. These differences are both in structural terms and in operational terms. In most cases, a factoring the international one is undertaken by interacting with the exporting factor, which is obviously resident in the country where the export was made and the importing factor, which operates in the supplier's country. The two factors interaction system is presented in Figure 1.7 below.
ϰϱ
&ŝŐƵƌĞϭ͘ϳdŚĞƚǁŽĨĂĐƚŽƌŝŶƚĞƌĂĐƚŝŽŶƐLJƐƚĞŵ
The system operates in this way. A supplier decides to export receivables. During the talks to reach a factual agreement, it will do exactly the same checks as a local business would take. The factor will be very careful to collect the following information about exportation of factoring:
ϰϲ
- Volume and sales types exported by country. - The exact terms used in each market of the country where it is exported, and if necessary by any customer. - The number and types of customers involved in the export. - Possible models of future sales and credit exposure. - The level of conflict and their reason.
At this point the emphasis is placed on the quality of the credit risk granted, which is exposed from the client list. This is for the good reason that the next export factor is provided by the importing factor if it can or not provide a loan protection in order to meet the exporter's requirements. Most export factors operate without alternatives and therefore it is extremely important that it be very safe for the other side of factoring to be able to provide the required level of service. It is therefore extremely important that this interaction be resolved from the first stages of operation.
ϰϳ
The existence of the two parts that interact efficiently so that both together provide a service means misunderstandings can be present and the less gray areas the better for interaction. Advantages of export factoring An exporting factor that is efficiently achieving its work can shift the fear of operating in a foreign market. By providing a fast and efficient credit line in the foreign market and collecting exporters' money, this factor can turn into a domestic factor. This is because, over time, the export factor has managed to create a database for customers who buy imported goods.There are also advantages in the process of collecting, as an importing factor can operate as efficiently as a bank. After a long time in the market, they know quite a bit good client. They will also be able to write to the client in his own language. As long as the communication between the two parties is good, the terms of the loan are clear and therefore there is also a clear policy in the collection and there is no reason for the payments not to be collected in a timely manner. There are also facilities in financing.
ϰϴ
Most exporter factoring suppliers will require money in their accounts the same as they would require a local factorization. But the specific factoring exporter is that they can offer the advantage of foreign currency lending, thus saving foreign exchange costs. So, above all, it's a full service package that significantly reduces the risk and the difficulties faced by exporting businessmen who seek to develop market capabilities out.
ϰϵ
CHAPTER 3 FACTORING IN REGION AND ALBANIA
3.1 Factoring in the region Greece For Greek financial experts, it is no coincidence that in Greece, over the past year, exports grew by 45%, while the factoring volume grew by 49% compared to the previous year. There are two reasons why this growth came: 1. Before the crisis, Greek companies were focused on selling to the domestic market and are now looking to sell to other markets. 2. Greek companies do not have liquidity, and credit import insurers do not want to cover this service. That's why the factoring companies are offering something.
ϱϬ
From the chart below we notice that factoring in Greece has been increasing. This is the result of the great importance this industry is taking. As noted, with the financial crisis, the slope of the chart has declined slightly.
Figure 1.9. The trend of factoring turnover over the years in Greece.
Their activity is supervised by the Bank of Greece, by Law 1905/1990 and by the regulations issued by the Governor of the Bank of Greece. This Bank exercises its authority by controlling the solvency of these companies, liquidity and risk concentration reports.
ϱϮ
Italy Italy has powerful factoring markets, which have had a steady growth over the past ten years. Italy is the third largest market in Europe for factoring services, having 45 companies operating in this sector with an annual profit of 132 billion USD. Over the years, this market has grown, though there is no significant growth rate. This is the result of the phase at which factoring is in this country (in the maturity phase).
Figure 2. Trend of annual turnover of the factoring
industry in Italy.
ϱϯ
The Credit Registry is the electronic identification and financial database of persons (their credit exposures to the banking and / or financial system) applying for loans at a bank, branches of a foreign bank licensed by the Bank of Albania or other lending institutions. Albania's legal and judicial environment is seeking to play a critical role in defining various financing products and the importance of factoring in it. A key factor for factoring is whether a financial system of trade laws sees it more like a sale and purchase transaction than a loan. If the legal system in Albania were to be treated as such, where factoring is nothing more than a sales-purchase transaction then the creditor rights of the underlying credit contract are less important for factoring because factoring commissioners are not creditors. This fact affects a case when a firm goes bankrupt, its receivable accounts will not be part of its bankruptcy estate because they will be owned by the factoring commissioner. In fact, the legal system treats factoring as a purchase of the supplier's receivables, meaning that the factoring company at the moment of the conclusion of the contract will have its own ownership of the supplier's receivables.
ϱϳ
In order for a contract to meet the conditions to be called the factoring contract it not a loan contract or a contract for the transfer of client account loans, which is only related to facilitating the collection of accounts, and the factor and the supplier are not the same subject. The factoring contract is related both to domestic receivables and to international receivables.
3.2.1 Factoring Market in Albania As in any country where the forces of the free market economy work well, in Albania the driving force of Albanian economic development is the private sector. This sector is growing steadily by delivering 75% of GDP and employing 83% of the workforce. The Albanian private sector is characterized by small and medium enterprises (SMEs), whose classification is based on the number of employees, annual turnover and / or annual balance sheet, according to Law no. 1042 dt. 22/12/2008 "On Small and Medium Enterprises".
ϱϴ
This division is made according to the European Union legislation, which considers as small and medium enterprises those with fewer than 250 employees (before this law in Albania were considered as small and medium enterprises those with fewer than 80 employees) with an annual turnover of no more than EUR 50 million and / or with a total balance not exceeding EUR 43 million. Based on this classification, SMEs represent 99.6% of active enterprises (96.20% are micro-enterprises), contributing to the formation of 72.9% of GDP and employing 71.4% of the workforce.In Albania, SME financing levels have been rising, but they are still considered inadequate to promote a rapid sector development. To improve the SME financing climate, some measures have been taken that relate mainly to the introduction of credit guarantee schemes for them. Applied Guarantee Funds are limited only to funded funding of certain areas and categories, leaving out the largest part of the SME sector. Also, SMEs, and especially new SMEs, face many difficulties in obtaining loans from the banking sector and the cost of credit is relatively high. This is due to the fact that banks
ϱϵ
ing department, as well as proceeding further by securing a license from the Bank of Albania and starting to provide this financial service to their clients. There are no genuine factoring companies that are out of the banking sector, providing licensing to two international companies as well. One of them is EFG Factor, a Greek company, which looks interested in the Albanian factoring market. EFG Factors, founded in 1999, is the subsidiary of EFG Eurobank Group, which is rated among the leading banks in Greece in lending, credit cards and lending to SMEs and small businesses. In Greece, EFG Factors ranked second with 27% of the market and the first in the international factoring for the Greek market by 47%. We can also mention the Albanian Factoring Services company, which is one of the three non-bank companies licensed to realize the factoring service that is introduced in this industry. These companies see the Albanian market very interesting. Their interest has been growing steadily for the factoring market in Albania. Deferring payment terms and lending difficulties have increased the interest of private businesses to work with a factoring company.From an interview conducted with specialists of the Bank of Albania it
ϲϯ
results that the volume of turnover of this industry from their beginnings to September 2014 has reached 35.736.023,97 lekë. In the non-bank financial sector, the factoring portfolio weighs as much as 0.4% of the financial leasing portfolio and 0.3% of the loan and microcredit portfolio. Despite the small figures compared to the figures provided by this industry in Europe and the world, they are still promising for a factoring development in Albania, for the fact that: First, Albanian exports are about 700 million USD a year, with about 90% of them going to Italy and Greece (both factoring companies are very organized). Secondly, because the companies themselves report profit (being profitable and having no worrisome barriers to entering this market, there will definitely be new entries).
During the period January - September 2014, revenues are reported 26.124.045,82 ALL and expenditures 13.397.802,73 ALL. As seen from the business turnover figure reported in 2014, 73% of the turno-
ϲϰ
ver realized by this industry was carried out during January - September 2014.
2013
2014
Figure 2.2. Turnover of the factoring industry in Albania
It is therefore seen that there is an enormous change in declared turnover, due to the fact that factoring companies have just started to realize their sales after a period of obtaining licenses. Their service is divided into two types of income, as allowed by the law itself, providing higher revenues from the collection service rather than the interests secured by the use of funds. Report on income from factoring companies .
ϲϱ
CHAPTER 4 ANALYSIS OF EMPIRICAL DATA, ECONOMETRIC MODEL Introduction We
completed
questionnaires
in
March-May
2015.We have conducted active observation through the drafting of two questionnaires: The first questionnaire is addressed to SMEs.A questionnaire was conducted for 110 companies, which have different operating facilities and operate in the Albanian market. Companies interviewed are randomly selected and most of them have their headquarters in Tirana.The second questionnaire is addressed to private banking and non-banking companies licensed by the Bank of Albania to provide factoring services. The first questionnaire was divided into four sections, drafting the questionnaire was done in such a way that interviewees understood the questions all the same and had no difficulty answering. Closed questionnaire questionnaires were used, according to which respondents are asked to provide a correct answer and where the number of response choices is limited. We used questions that had two answers, YES or NO, and
ϲϳ
most of the questions were many choices but with the same answer. The questions used are short and straightforward, which enable you to obtain the most requested information as accurately as possible. The four interviewed companies, ASF and OMNI Factor, Pro Factoring, ZIG Kompany, and eight second-tier Banks, claim that there are suppliers in Albania but providing information to the customers of these suppliers is extremely difficult.Conclusions of the questionnaire: Most of the surveyed companies, operating in the Albanian market, with the services and different facilities of their activity, feel the lack of liquidity. This is because 30% of them manage to collect their accounts receivable after more than 90 days, 11% of them manage to receive only 50-70% of their turnover within the year and 39% of them result in negative working capital. In Albania, despite the fact that there are limitations due to the inherited mentality of doing business, there is room for the use or development of factoring business, as a new short-term alternative option, as the firms we received in the study resulted in a lack of liquidity.
ϲϴ
4.1 Analysis of data The data collected from the questionnaire, which we prepared for SMEs, were analyzed through the SPSS statistical program to highlight the need of the factoring industry in Albania and what types of companies could demand the service provided by factoring. Do SMEs have a lack of liquidity? If so, what financial resources do they use to fund working capital needs? With the data we provided from the answers to questionnaires we have studied the demographic characteristics of SMEs.To analyze the factors influencing the use of factoring and the characteristics that firms should use factoring as a source of short-term financing, we have analyzed the answers we have gathered from the completed questionnaires, giving the relevant conclusions at the end.To the question of what is the actual payment repayment period of your main clients, respondents answered the following: Question 1. What is the current repayment period of payments from your major buyers?
ϲϵ
Alternativa
Frekuenca
Perqindja
0-30 dite
22
20%
30-90 dite
55
50%
Mbi 90 dite
33
30%
totali
110
100%
Table 3. Actual repayment duration.
Figure 2.4. Current payment repayment duration (right, percentage rate).
ϳϬ
As we see from the table and above chart, SMEs that are already consolidated in the market feel the lack of liquidity as 30% of them manage to collect their accounts receivable after more than 90 days. Analyzing the seniority of the receivables of the enterprises surveyed, we can say that this extension in the timing of these accounts indicates that clients pay late and this is the financial difficulty they encounter during their operation in market. We have continued with the question of how many percent of the turnover they collect these SMEs within a 12 month period and respondents answered us as follows: How much turnover have you received in the last 12 months from your customers? Alternativa 0-10% 20-40% 50-70% 80-100% totali
Frekuenca 3 90 12 5 110
Perqindja 3% 82% 11% 4% 100%
Table 3.1. Percentage of turnover collected within the year.
ϳϭ
͘
Figure 2.5. Percentage of turnover collected within the year (right, percentage rate).
From Table 3.2 and Figure 3.3 we see that 3% of them manage to collect 0-10% of their turnover within the year, 82% of them receive 20-40% of turnover and only 11% of them manage to receive only 50-70 % of their turnover within the year. While 80-100% of the turnover is only 4%. This shows once again the financial difficulty faced by the SMEs that are taken into study.
ϳϮ
To see if the firms we have taken in the study lack liquidity or not, we continued with the question: Did you have a lack of working capital during your business?
Table 3.2. Lack of working capital for firms under study. Alternativa
Frekuenca
Perqindja
Po
43
39%
Jo
67
61%
Total
110
100%
ϳϯ
Figure 2.5. Alternatives to Lack of Working Capital.
From the responses we see that 61% of firms had no shortage of working capital, while 39% of them had a shortage of working capital. This figure is considerable and clearly shows the lack of liquidity faced by Albanian firms that we have taken in the study.Although the need for funding seems to be obvious, again companies operating in the Albanian market prefer or are obliged to use more the selffinancing method and other short-term financial instruments for working capital. This is shown in Table 5.7 and in the following chart 5.8. Only 18% of these needs are financed by loans, 37% are financed by self-financing, 24% are funded by the partners and other members of the group, and 21% by other financial instruments. This is due to the fact that banks are too fragmented about working capital loans to these new companies, but the ability to provide collateral to banks is too difficult for these companies. Although over 60% of interviewed companies recognize factoring as a short-term financing way, again the interpretation of how a factoring company functions was different. Failure to operate a stock market in Albania causes small
ϳϰ
and medium-sized businesses to struggle to provide the necessary capital for working capital. Alternativa
Frekuenca
Perqindja
Vetefinacimi
41
37%
Hua
20
18%
Ortake dhe pjestare grupi
26
24%
Instrumente te tjere finaciare
23
21%
Which financial resources do you use for working capital? dĂďůĞϯ͘ϯ͘&ŝŶĂŶĐŝĂůƌĞƐŽƵƌĐĞƐƵƐĞĚĨŽƌǁŽƌŬŝŶŐĐĂƉŝƚĂů
Figure 2.6. Use financial resources for working capital (right, percentage rate).
ϳϱ
Then we continued our analysis with the answers to the question of what do you expect to invest in your business for the next 5 years?
Table 3.4. Forecast of future investments by SMEs
Alternativa
Fekuence
%
Makineri, Ndertesa Aktive ,qarkulluese Aktive mqarkullu finace Totale
20
18
56
51
34
31
110
100
ϳϲ
Figure 2.7 Forecast of future investment by SMEs taken in the survey (right, percentage rate).
From Table 3.4 and Figure 2.7 we see that the investment of the enterprises taken in the study for the next five years will be 51% for material assets, 31% for financial assets and only 18% for buildings, machinery and equipment. This shows that SMEs will be more focused on short-term management of their businesses, continuing to be attracted to undertaking long-term projects and plans. As we see from the above indicators, the largest investments will go for working capital, so the need for shortterm funding sources will increase.
To test how small and medium enterprises we have taken in the study to use factoring as a source of short-term funding are ready, in the questionnaire prepared for them we have placed the following questions: Question: Can you liquidate your suppliers on time?
ϳϳ
Table 3.8. Timely liquidation of suppliers. Alternativa
Frekuenca
Perqindja
Po
30
27%
Jo
80
73%
Totali
110
100%
Figure 2.8. Liquidation alternatives of suppliers timely. Respondents replied that only 27% of them managed to liquidate vendors timely, while 73% responded that they failed to pay timely to suppliers, making it difficult for them to continue their
ϳϴ
activity.How much trouble do you encounter when you fail to timely account accounts payable from 0 to 10? (where 0 expresses lack of difficulty and 10 difficulties
to
obstruct
the
company's
daily
operation),
Table 3.9. The degree of difficulty from timely failure of suppliers. Alternativa
Frekuenca
Perqindja
0-3
22
20%
4-7
55
50%
8-10
33
30%
Totali
110
100%
ϳϵ
Figure 2,9. Degree of difficulty from lack of timely delivery of suppliers (right, percentage rate).
Respondents responded as follows: Only 20% of them encountered difficulties on the 0-3 scale. 50% of the respondents assert their difficulties with the liquidation of their suppliers by a high grade 7 and 30% of them have responded to difficulties at the 810 scale, which is the maximum difficulty for the current businesses because the liquidation of suppliers does not directly affect their supply with the raw material necessary for their performance in the market. One of the most important liquidity indicators is the working capital. It is calculated as the difference between short-term assets and shortterm liabilities. When short-term assets exceed short-term
liabilities,
working
capital
results
positive. A positive working capital expresses a good liquidity condition for society. The higher this indicator is, the more liquid the company or the economic entity, and the more "security" they express their financial statements for creditors who do not want a cash shortage. When short-term liabilities exceed short-term assets then we have a shortage of working capital, which indicates that the entity has a lack of liquidity. This financial
ϴϬ
condition forces firms to seek external financing.
Are you willing as an entity to provide information about the payment performance of your customers?
Table 4. Information on the payment performance of clients. . Alternativa
Frekuenca
Perqindja
Po
43
39
Jo
67
61
Totali
100
100
ϴϭ
Figure
3.
Customer
payment
performance
information.
From Table 4 and Graph 3 we find that 39% of respondents responded that they are willing to provide information about the payment performance of their clients, while 61% responded that they are not ready. This is just a mentality problem that Albanian businesses are currently considering, as a debt-issuing company's information on the progress of their account receivables. But again, we can say that 39% is a very promising figure for creating a good environment for the functioning of the factoring business. The question whether you are willing as an entity to provide information about your obligations to suppliers? Table 4.1. Information on obligations to suppliers. Alternativa
Frekuenca
Perqindja
Po
40
36
Jo
70
64
Totali
110
100
ϴϮ
Figure 3.1. Information on obligations to suppliers
So even in this case, we see that only 36% of respondents answered the question positively, while 64% responded that they are not ready to provide information on their obligations to suppliers.
We have continued our analysis with the following question.
Would you accept that your customer's receipts be realized by a factoring company or a bank?
Table 4.2. Customer collection options from factoring companies or banks.
ϴϯ
Alternativa
Frekuenca
%
Po
44
40
Jo
66
60
Total
100
Figure 3.2. Customer collection options from factoring companies or banks.
We see that 40% answered positively to the question, while 60% responded negatively, thinking that perhaps collecting accounts receivable from a factoring company would lead to an irritation of their client.
To the question: Would you accept that your obligation to the seller be settled through a bank?
ϴϰ
Table 4.3. Clearing the supplier's obligation through a bank. Alternativa Po Jo Totali
Frekuenca 77 33 110
Perqindja 70 30 100
Figure 3.3. Clearing the supplier's obligation through a bank.
To the above question, 70% of respondents responded with YES. So they could pay their supplier through a second tier bank after they were told they would pay the bill under the terms agreed with the vendor. This result, as we have encountered in world literature, gives priority to the development of factoring served by banks. This is a very wellknown factoring factor in Italy, where factors that are part of banking groups are the main players in
ϴϱ
the market. While 30% of respondents responded negatively to this question, therefore they do not prefer that a third company or bank be involved in the relationship between them and the supplier. They
prefer
traditional
business-to-business
relationships. So we see that the barrier to using faktoring as a short-term source of funding to meet the needs for working capital are also the firms themselves that find it difficult to change the mentality of doing business. are the main players in the market. While 30% of respondents responded negatively to this question, therefore they do not prefer that a third company or bank be involved in the relationship between them and the supplier. They
prefer
traditional
business-to-business
relationships. So we see that the barrier to using faktoring as a short-term source of funding to meet the needs for working capital are also the firms themselves that find it difficult to change the mentality of doing business.
4.2 Analysis of variables affecting factorization
There have also been early empirical studies from Cfr. Mian and Smith (1992), Smith and Schnucker (1994), Summers and Wilson (2000), and Soufani
ϴϲ
(2001). In all of these studies it has been proven that financial constraints or high liquidity shortages, especially small firms and their beginnings, make them more predictable to use factoring. According to them, the higher the debt level, the lower the cash flow and the other liquidity indicators, the higher the probability of the firms selling their receivables.
Pr (Factoringu) = F (Demographic Indicators, Development Indicators, Financial Limit Indicators) So to prove the impact of these factors, we have defined them as independent variables, while Factoring as a dependent variables.
First Group: Demographic Factors
1. FIRST AGENDA: The number of years since the establishment of the firm by 2014.
2. SIZE SIZE The size determined on the basis of the annual turnover level.
3. SECTOR: The industry sector where the firms under study are operating.
4. Legal ownership
ϴϳ
Third hypothesis (H3): Does the factoring service tend to be more focused on firms operating in the manufacturing and distribution sector?
Hypothesis 1: Enterprises that use factoring are small and medium enterprises, compared to annual turnover?
Table 4.4. Volume of turnover for SMEs taken in the study.
Qarkullimi
%e Numri i Numri i firmave firmave firmave që të marra që në përdorin përdorin studim faktoring faktoring
Më pak se 2,000,000 ALL
5
0
0%
2,000,000 ALL 4,999,999 ALL
12
0
0%
5,000,000 ALL 7,999,999 ALL
21
7
33%
8,000,000 ALL 14,999,999 ALL
38
12
32%
15,000,000 ALL 100,000,000ALL
15
6
40%
Mbi 100,000,000 ALL
19
1
5%
Totali
110
26
24%
ϴϵ
To analyze the relationship between the annual turnover of companies and the number of those who receive the factoring service, 110 companies have been reviewed. Among these, only 26 of them receive the factoring service. Referring to Table 4.4 and Graph 3.4 below, we note that the largest number of companies receiving the factoring service is in the range of 5 000 000 - 8 000 000 ALL. This is explained by the fact that companies
that
have
annual
turnover
under
2000,000 ALL this turnover are realized by cash sale (ie they do not use receivables). While companies with turnover above 100,000,000 ALL do not need factoring because they can easily use bank loans. We have analyzed this hyperbolic relation through the regression method, where as independent variables we have the turnover level, and as the variable dependent the number of companies using factoring. Based on the data obtained from the table, we have also found the relation between these variables, which is expressed by the corresponding equation: y =3.375x2 +10.42x +11.3
ϵϬ
The equation is of the second degree, which means that the link is hyperbolic. The coefficient para x² is negative, which means that hyperbola is inverted and indicates that companies that have very high and very low annual turnover do not need factoring. Consequently, we can answer the hypothesis that factoring is the most suitable funding source for SMEs. The determination coefficient is R² = 0.697 which indicates a good correlation between the two variables taken into consideration.
Figure 3.4 Connection between factoring as a source of financing and turnover of the company.
Hypothesis II: Does the factoring service tend to be more focused on new firms that have 1-5 years operating in the market?
ϵϭ
Table 4.5. Age of SMEs taken in the study. Mosha e firmave në treg Më pak se një vit
Numri i Numri i %e firmave të firmave që firmave që marra në përdorin përdorin studim faktoring faktoring 14
0
0%
1 - 5 vjet
56
17
30%
5 - 10 vjet
31
8
26%
mbi 10 vjet
9
1
11%
Totali
110
26
24%
Figure 3.5. The relationship between factoring as a source of funding and the company's age.To analyze the relationship between the age of companies and the number of those companies that receive the factoring service, 110 companies have been reconsidered.
ϵϮ
Referring to the study we have done, as we note from table 4.5 of the turnover and the 3.5 chart only 26 of these companies use the factoring service. We see that companies that have less than a year in the market do not use this service, as well as companies that have been operating in the market for over 10 years. So, from the above observations we find that more focused on using factoring services are new firms that have 1-5 years operating in the market.We have analyzed this hyperbolic relation through the regression method, where as independent variable we have taken the age of the company, and as a dependent variable the number of companies using factoring. Based on the data obtained from the table, we found the relation between these variables, which is expressed by the corresponding equation:
y =6x2 + 2.94x + 22 The equation is of the second degree, which means that the link is hyperbolic. The coefficient para x² is negative, which means that the hyperbola is inverted and indicates that companies that have less than one year and more than 10 years operating in the market do not need factoring.The determination coefficient is R² = 0.788, which indicates a good correlation between the two variables taken into consideration.
ϵϯ
Hypothesis III: Does the factoring service tend to be more focused on manufacturing and distribution firms?To prove the hypothesis that the financial factoring service tends to be more focused on firms operating in the manufacturing and distribution sector, the responses of the 110 companies we have taken into consideration are taken into account. As noted above, only 26 of them use factoring as an alternative source of funding. From the study, we can see from Table 4.5 that the sector that is less inclined to use factoring is the non-bank financial services sector, followed by the construction sector and the retail sector. These sectors, by their very nature, pass ownership of the owner to the full liquidation of the owner's obligation to these companies. This makes it impossible to create accounts receivable.Lack of these accounts reduces the need for funding through factoring. This is not the case for firms operating in the manufacturing, wholesale and transport-communication sectors. This is because firms, in order to benefit from the supplier's down payment terms, require liquidation of their bills within the specified time (n / 30, n / 60, n / 90). But on the other hand, to have a faster inventory turnover sell on credit (with later
ϵϰ
payments). These two factors create a lack of liquidity in these firms. That is why firms operating in these sectors have a greater tendency to use financial factoring as an alternative source of funding. The same thing is shown in Graph 5.16, which in the X axis represents the industries sectors: 1-Non-Bank Financial Services, 2-Construction, 3Transport
/
Manufacturing,
Communication,
4-Retail,
5-
6-Professional
Services,
7-
Wholesale.The Y axis represents the number of firms that receive factoring, according to each industry sector.
ϵϱ
Table 4.6. Factoring by Industry Sector. S e k t o r i Shërbime financiare jobankare
Num ri i firma ve të marr a në studi m 3
Num ri i firma ve që përd orin fakto ring 0
%e firm ave që përd orin fakto ring 0%
Ndërtim
12
1
8%
Transport /komuniki m
7
1
14%
Shitje me pakicë
19
2
11%
Prodhim
11
6
55%
Shërbime profesion ale
33
7
21%
Shitje me shumicë
25
9
36%
Totali
110
26
24%
ϵϲ
Figure 3.6. Link between factoring and industry branches.
In this way, we have responded to the hypothesis that the factoring service tends to be more focused on production and distribution firms.Second set of indicators: Growth indicator
Hypothesis VI: The higher the debt level, the lower the possibility of borrowing from banks, and the higher the likelihood of using factoring as a shortterm funding source? One of the indicators we have selected as important that can affect the use of factoring is the debt ratio. This report takes into account the share of all debt-financed assets. A large debt corporation has difficulty extending debt financing, as creditors can only owe debt at high
ϵϳ
Tabel 4,8 Statistic Multi 0.42933854 ple R 1 R 0.18433158 katr 3 ori R katrori i axhustuar
0.15034539 8
Gabimi standard
59.9017074 1
Vëzh gime S 59.901R 18%,
2
2
R a dj
2 6
15%
ϵϵ
Tabel 4,9. Analise of variance. Bu ri mi
D SS
Regresion i Gabimi i mbetur T ot al i
M S
F
19461. 19461. 5.423 47486 47 721 2 4
Kup timi F 0.02 8611
86117. 3588.2 14921 15
2 105578 5 .6241
Analyzing the data of the above regression, debt turns out to be a factor affecting the use of factoring.
P (probability) values 0.02
