Volume 7, Issue 3, 109-117.

Factoring as the Short Term Finance for SME and Possibility of Its Application in Albania

Shpresa CELA*, M.A.

Faculty of Economics,  University of Tirana, Albania. E-mail: sh_cela@hotmail.com; Tel:+00355 68 20 95 870.

Rezarta SHKURTI, Ph.D

Faculty of Economics, University of Tirana, Albania. Email: rezartaperri@gmail.com; Tel: +355 69 40 22 809; +355 42 451 334.

Blerina HILAJ, M.A.

A&B Business Consulting, Boulevard Gjergj Fishta, Kulla 3, Ap6, Albania. Tel:+355 4 22 58 326.


During the finance crisis the small and medium enterprises are facing with the liquidity problem. To solve that problem they try to find new solution for their financing. One of these solutions is factoring. The main purpose of this research paper is to give some evidences of factoring industry in Albania and build an econometric model on usage of factoring. The econometric model is created by verifying 5 hypotheses on the factoring as a short-term financing source for the small and medium enterprise. In recent years factoring has experienced a phenomenal growth and has become an important source of financing – especially for short-term working capital – for small and medium enterprise. That is the motive that we will emphasize, whether this type of working capital finance will well function in Albania. It will argue that factoring is a source of financing for working capital and an instrument to improve the liquidity of the firm but he has not a universal use.

JEL Classification: G24.

Key Words: Participants in the Factoring Contract; Supplier; Factor; Client; Rights and Obligation of the Participants; Factoring Contract Types.

*Corresponding author.

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