Cairo, 26 September 2022 – African Export-Import Bank (Afreximbank) has commended the Governments of Niger and Burkina Faso for adopting a factoring law to support the business activities of SMEs.
The enactment of the factoring law by these two countries will support the emergence and growth of factoring, which in turn will support SMEs in these countries. The factoring law will ensure certainty and confidence and will create a facilitative environment for the conduct of factoring transactions including clarity in the taking of assignments and enforcement of the rights of the factor.
The factoring law as adopted by Niger and Burkina Faso was drawn from the Central Bank of West African States (BCEAO) Factoring Law, which was developed on the basis of Afreximbank’s Factoring Model Law. Launched in 2016, the Afreximbank Factoring Model Law is designed to guide African countries in the enactment of their national factoring laws. It reflects the Bank’s strategy of supporting enabling legal and regulatory environments for factoring to thrive on the continent.
Commenting on the news, Mrs. Kanayo Awani, Afreximbank Executive Vice President, Intra-African Trade Bank, said that the adoption of these laws will boost to the development and growth of SMEs in Niger and Burkina Faso.
“By creating a legal infrastructure that supports the diversification of SME financing, and provides credibility and assurance to investors, a factoring law significantly improves access to financing for small and medium-sized enterprises. The potential development impact of this law will be significant as it offers access to finance to previously excluded small business groups, which constitute a large proportion of the economies of both countries. I am delighted that the Governments of Burkina Faso and Niger have taken this important step to increase financial inclusion and championing greater access to effective financing. We encourage other countries in the BCEAO region in particular and Africa in general that have not yet enacted factoring legislation to follow the steps of Niger and Burkina Faso.”
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African Export-Import Bank (Afreximbank) is a Pan-African multilateral financial institution mandated to finance and promote intra-and extra-African trade. Afreximbank deploys innovative structures to deliver financing solutions that support the transformation of the structure of Africa’s trade, accelerating industrialization and intra-regional trade, thereby boosting economic expansion in Africa. A stalwart supporter of the African Continental Free Trade Agreement (AfCFTA), Afreximbank has launched a Pan-African Payment and Settlement System (PAPSS) that was adopted by the African Union (AU) as the payment and settlement platform to underpin the implementation of the AfCFTA. Afreximbank is working with the AU and the AfCFTA Secretariat to develop an Adjustment Facility to support countries in effectively participating in the AfCFTA. At the end of 2021, the Bank’s total assets and guarantees stood at about US$25 billion, and its shareholder funds amounted to US$4 billion. Afreximbank disbursed more than US$51 billion between 2016 and 2021. The Bank has ratings assigned by GCR (international scale) (A), Moody’s (Baa1), Japan Credit Rating Agency (JCR) (A-) and Fitch (BBB). The Bank is headquartered in Cairo, Egypt