By Tony Obiechina, Abuja
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 development, 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.”