| Author | Islam, Mohammad Zahirul |
| Note | A project submitted in partial fulfillment of the requirements for the
degree of Professional Masters in
Banking and Finance, School of Management |
| Publisher | Asian Institute of Technology |
| Abstract | Export Factoring, a risk minimizing financing tool under open account, will increase
export volume with diversified export basket and new market reach in Bangladesh. Based
on this motivation this study tried to identify feasibility of export factoring by measuring
exporters’ orientation RAG model, the risk-cost trade off model and cost-comparison
model of open account payment term comparing with other available trade payment terms
i.e. advance payment, letter of credit and documentary collection. This study conducted an
individual and enterprise level survey and in-depth interviews based on structured
questionnaire among Bangladeshi exporters, whom need working capital finance from
banks for exporting different countries, especially in RMG sectors. This study provides an
insight with low precision level that exporters perceived no business risk in switching from
one payment terms to another and only thing matters is high transaction cost as businesses
are operating in a thin margin environment. This study also sheds light on open account
being least cost method can be a better alternative to LC offering win-win situation for the
exporter who transact in high value. However, the risk of nonpayment under OA requires
introducing export factoring for specific exporter and promoter in light of international
experiences. |
| Year | 2016 |
| Type | Project |
| School | School of Management (SOM) |
| Department | Other Field of Studies (No Department) |
| Chairperson(s) | Venkatesh, Sundar;Roy, Shyamol |
| Examination Committee(s) | Wijewardena, Weerakoon A.;Zimmermann, Willi |
| Scholarship Donor(s) | Bangladesh Bank (Central Bank of Bangladesh) |