The purpose of this study is to find out the way to develop export factoring in Korea. As importers prefer to trade on open-account terms instead of using the L/C, export factoring is a strategic alternatives for financing after shipment.
In order to develop export factoring, the government should make efforts to establish relevant laws. Also, cooperating with export credit agencies, the financial companies dealing in foreign exchange should not only handle export financing but also extend the range of financial service related to account receivables management. Furthermore, it is necessary to reduce the factoring cost and to be focused on small and medium sized export firms.
Finally, export firms should positively accept export trade of deferred payment terms and also choose a strategy to cover export finance and credit risks management through export factoring.