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An Analysis of the Payment Habits of Hungarian Micro, Small and Medium-sized Enterprises – In Focus: Cash Usage

Author

Listed:
  • Ágnes Illés Belházy

    (Magyar Nemzeti Bank)

  • Tamás Végsõ

    (Magyar Nemzeti Bank)

  • Anikó Bódi-Schubert

    (Magyar Nemzeti Bank)

Abstract

In this study, we examine the cash usage of Hungarian micro, small and mediumsized enterprises along with the main reasons behind the use of cash by analysing data from a questionnaire-based survey conducted on a sample comprising 1,000 corporate managers. In this context, we study the payment habits of enterprises, their ties with financial institutions, the degree of distrust in the Hungarian corporate sector and potential tools for the reduction of cash usage. Wherever possible, we compare our results to the conclusions of previously published Hungarian or foreign research conducted with a similar focus. According to our most important findings, credit transfer is clearly the most prominent payment method both in the SME sector and among microenterprises, but the rate of cash usage is also high and it does not exhibit a declining trend. Positive changes can be observed, however, in payment discipline and business confidence. Hungarian enterprises are loyal to their account manager banks, and although they are essentially open to electronic payment solutions they are highly sensitive to the associated costs.

Suggested Citation

  • Ágnes Illés Belházy & Tamás Végsõ & Anikó Bódi-Schubert, 2018. "An Analysis of the Payment Habits of Hungarian Micro, Small and Medium-sized Enterprises – In Focus: Cash Usage," Financial and Economic Review, Magyar Nemzeti Bank (Central Bank of Hungary), vol. 17(4), pages 53-94.
  • Handle: RePEc:mnb:finrev:v:17:y:2018:i:4:p:53-94
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    References listed on IDEAS

    as
    1. András Bethlendi & Richárd Végh, 2014. "Crowdfunding – could it become a viable option for Hungarian small businesses?," Financial and Economic Review, Magyar Nemzeti Bank (Central Bank of Hungary), vol. 13(4), pages 100-124.
    2. Mike Burkart & Tore Ellingsen, 2004. "In-Kind Finance: A Theory of Trade Credit," American Economic Review, American Economic Association, vol. 94(3), pages 569-590, June.
    3. Dániel Havran & Péter Kerényi & Attila Víg, 2017. "Trade Credit or Bank Credit? – Lessons Learned from Hungarian Firms between 2010 and 2015," Financial and Economic Review, Magyar Nemzeti Bank (Central Bank of Hungary), vol. 16(4), pages 86-121.
    4. Tamás Ilyés & Lóránt Varga, 2015. "Show me how you pay and I will tell you who you are – Socio-demographic determinants of payment habits," Financial and Economic Review, Magyar Nemzeti Bank (Central Bank of Hungary), vol. 14(2), pages 25-61.
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    More about this item

    Keywords

    SME sector; microenterprises; cash usage; payment habits; business confidence; credit institution preferences; electronic payment solutions;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation

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