TY  - BOOK
AU  - Effosse,Sabine
TI  - The emergence of factoring in France, 1961-1973: A marginal sector in search of recognition
PY  - 2015///.
							
N1  - 46
N2  - Factoring is a debt management and collection method that has been growing significantly since the financial crisis of 2007-2008. It nonetheless remains relatively unknown and is somewhat hidden as a form of business financing. Factoring is an alternative to business-to-business lending and allows companies to insure themselves against late payments and customers insolvency. Today, as in the past, factoring has found it difficult to gain acceptance as a legitimate form of finance. It is thus of interest to return to the early experience of factoring in France and this article identifies the major challenges of its development, the players involved (factors, regulators) and the companies who used it. Firstly, the article shows that American factors played a leading role in setting up new factoring companies in Europe, and that this was linked to the construction of the Common market and the Kennedy export program. The article then explains how, faced with this situation, French financial authorities were reluctant to approve the creation of new factoring companies. Factoring could increase short-term credits and thus inflation and the identification process of the credit recipients would be complex as factoring introduced a third party between the company and its suppliers. Finally, the article explains how French economic priorities for growing exports and modernising short-term credit led to the formal recognition of factoring in 1973. Factoring did not really succeed immediately, however. The small and medium-sized enterprises, which were targeted by the factors, were reluctant to use this form of financing as it was much more expensive than credit discounting. In addition, they were afraid of losing control over the management of client relationships. As a result, companies mostly used factoring in periods of financial stress and factoring thus became a sign of financial difficulty and subsequently developed a poor reputation. Improving this negative image remains the key issue for a sector which is experiencing dramatic change. The challenges faced highlight how difficult it is to involve a third party in a business relationship without altering the trust of customers
UR  - https://shs.cairn.info/journal-entreprises-et-histoire-2014-4-page-114?lang=en
ER  -