Activity, Improving Financial Pe The effect of factoring activity in improving the financial performance of small and medium-sized companies in Egypt: an applied study The effect of factoring activity in improving the financial performance of small and medium-sized companies in Egypt: an applied study

Abstract

Factoring has emerged as a vital financial tool for small and medium-sized companies, as it is one of the tools of modern financial engineering and one of the new sources of alternative financing. It contributes to alleviating cash flow restrictions, supports business growth for these companies, and improves their financial performance., therefore, this study aims to identify the impact of factoring activity in improving the financial performance of small and medium-sized companies in Egypt, through an applied study on a sample of 10 small and medium-sized companies registered on the Nile Stock Exchange and practicing factoring activity.

  Through analysing the quantitative data of the study, the study concluded that there is an effect of factoring activity in improving the financial performance of small and medium-sized companies in Egypt at a significance level of less than 5%.

  The study recommended the necessity of expanding factoring activities and adopting them as an alternative financing tool in the companies under study, given the impact of factoring activity in improving all financial performance indicators under study.

  The study also recommended the need to overcome the obstacles and challenges of using factoring in financing small and medium-sized companies in the Egyptian business environment, as well as building and developing the infrastructure and information necessary for the factoring process and activating the role of the Financial Supervision Authority.