Short-term financing in cash-constrained countries
Firms operating under cash constraints may not be able to order or produce optimally. Especially for fast-growing firms, money acts as a catalyst if potential demand is high but financial constraints leave them no choice but to order less.
Cash constrains is a critical issue facing firms in developing countries where access to finance is limited and capital is tied. Firms running in cash constrained environments are facing an unfavourable challenge and are unable to operate in an optimum manner as scarcity of cash is hindering their investment, production and purchasing decisions.
One of the main ways in which scarcity of cash effects the performance of firms and supply chains is working capital.
I will be talking about working capital following this section, so don’t go into working capital, just prepare the reader to move into the next section which is working capital.
Second part 2- Discuss and prove that “Jordan” and firms in Jordan are classified as cash constrained. (600 words)