By Amadou Labba Sall
African Export-Import Bank (Afreximbank) announced that the Republic of Congo has enacted a factoring law to support business activities. The Bank congratulated the Republic of Congo saying that the move constitutes a critical milestone in its efforts to increase Africa’s share of global factoring volumes from its current level of around 1%.
Factoring offers an alternative trade finance instrument to African firms especially SMEs, and therefore this enabling law will provide a major boost to the development and growth of SMEs in the Republic of Congo. By creating a legal infrastructure which supports diversification of SME financing, and provides credibility and assurance to investors, the law significantly facilitates access to finance for previously excluded small and medium sized businesses in the Republic of Congo. Moreover, the Republic of Congo’s initiative will serve as a model to Central African States in particular, and other African States who are yet to enact a law on factoring, by demonstrating the benefits of such legal reforms.
Commenting on the news, Professor Benedict Oramah, President and Chairman of the Board of Directors of Afreximbank, said:
“The Republic of Congo’s adoption of the Factoring Law represents a major step forward for Africa’s thriving SMEs, and broadens financial options to them. The adoption of the law will act as a catalyst to the growth of factoring in Congo. We are delighted that the Congolese Government is championing innovative ways of doing business and promoting financial inclusiveness. We are proud of our role in facilitating this process.”
Afreximbank’s Factoring Working Group, led by Ms. Kanayo Awani, Managing Director of the Bank’s Intra African Trade Initiative, played a pivotal role in the development of the law. The Bank’s Factoring Model Law served as a guide to legislators as they developed and promulgated the Republic of Congo’s law. The Bank played a central role in the review and drafting process.
The National Office of the Banque des Etats de I’Afrique Centrale (BEAC), the Banque Postale du Congo and the World Bank are also acknowledged for their significant contributions and key roles.
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. The Bank has a rich history of intervening in support of African countries in times of crisis. Through the Pandemic Trade Impact Mitigation Facility (PATIMFA) launched in April 2020, Afreximbank has disbursed more than US$7 billion to help member countries manage the adverse impact of the financial, economic, and health shocks caused by the COVID-19 pandemic. 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 2020, the Bank’s total assets and guarantees stood at US$21.5 billion, and its shareholder funds amounted to US$3.4 billion. Afreximbank disbursed more than US$42 billion between 2016 and 2020. The Bank has ratings assigned by GCR (international scale) (A-), Moody’s (Baa1), Japan Credit Rating Afency (JCR) (A-) and Fitch (BBB-). The Bank is headquartered in Cairo, Egypt.
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