![]() |
Members of the Afreximbank Factoring Working Group with the
Afreximbank Model Law on Factoring
|
The African
Export-Import Bank (Afreximbank) has introduced a model law on factoring to
provide a benchmark for African national legislatures enacting arrangements
aimed at fostering the growth of factoring activities across the continent.
The Afreximbank Model Law on Factoring, which was unveiled in
Cape Town, South Africa, on Sunday during the seventh Annual Meeting of the
Africa Chapter of Factors Chain International (FCI), on the sidelines of FCI’s
annual meeting, is based on recommendations received from consultative meetings
with factors, government and regulatory bodies, enterprises, legal experts and
banks across Africa and the world.
Launching the model law, Kanayo Awani, Chairman of the Africa
Chapter of FCI and Managing Director of Afreximbank’s Intra-African Trade
Initiative, predicted that the document would have profound impact on the way
small and medium-sized enterprises (SMEs) were financed in Africa.
“Its development impact will be phenomenal, facilitating
access to finance for excluded small and medium-sized business,” said Ms.
Awani, who spoke on behalf of the President of Afreximbank, Dr. Benedict
Oramah. “We have placed the promotion of intra-African trade on the front
burner of our current strategy and recognize the support which SMEs need as
indirect exporters in regional value chains.”
Calling on regulators and lawmakers to treat the adoption of
the model law with urgency, Ms. Awani pointed out that strengthening
legislation was critical to easing the way collaterals were created, perfected
and enforced as part of the financing provided to enterprises through
factoring. Such strengthening, she added, provided credibility and business
assurance to investors.
The model law defines and protects the rights of parties to
factoring transactions, including those relating to following assignments,
nullification of bans on assignment, exclusion of certain receivables, rights
between factors and clients, debtor protection, competing rights to receivables
and international factoring.
To advance factoring in Africa, Afreximbank has been
providing lines of credit to factors, creating awareness and building capacity
among key players and assisting in the creation of facilitative infrastructure.
In 2015 Africa accounted for only 0.7 per cent of the €2,373
trillion factoring transactions recorded across the world, with South Africa,
Tunisia, Morocco, Egypt and Mauritius accounting for almost all the African
transactions.
Participating in the Sunday’s launch ceremony were factoring
regulators from across Africa, representatives of international law firms,
members of the Africa Chapter and high level representatives of the FCI. The
launch had been preceded by two seminars, organized by Afreximbank in Abuja and
Abidjan earlier in the year, which came up with road maps for implementing
local legal frameworks inspired by the model law. Another seminar will take
place in Nairobi in November.
In factoring, an exporter or supplier sells his accounts
receivable or invoices at a discount to a third party, called a factor, in
exchange for immediate cash with which to finance continued business.
Manal Mounir Hendy
Associate
Communications
No comments:
Post a Comment
Please restrict your comment to the subject matter.