Because arranging short-term finance remains a matter of concern for small- and medium-size enterprises (SMEs), the central bank yesterday suggested the introduction of factoring.
Factoring will help SMEs overcome shortage of working capital as they can get it without any collateral, Bangladesh Bank (BB) Governor Fakhruddin Ahmed told the inaugural session of a two-day international symposium on Factoring organised by SouthAsia Enterprise Development Facility (SEDF) in Dhaka.
"We should not wait for perfection. The more we apply the system, the more we'll learn about the system towards perfection. We need a legal framework for allowing international factoring but there is no barrier to introducing domestic factoring," he said.
The Bangladesh Bank governor said factoring is a very popular funding methodology in developed countries and it can be a source of working capital for SMEs in Bangladesh and also real estate companies, which always need liquidity....
