The factoring market in the Western Balkans 6 remains underdeveloped; with limited market awareness; low adoption rates; and significant challenges related to late payments and trade credit. Understanding the market dynamics; demand drivers; operational practices; and economic impact of factoring is essential to facilitate its expansion and ensure MSMEs have improved access to liquidity solutions. Factoring plays a crucial role in bridging financing gaps caused by extended payment terms and trade credit constraints. Therefore; this analysis will focus on market structure; industry trends; demand-supply dynamics; and the role of factoring in mitigating payment delays and trade credit risks.