African Export-Import Bank (Afreximbank) is celebrating the adoption and enactment of a factoring law in the Republic of Mali.
Afreximbank’s Factoring Model Law was used as a guide for the development of La Banque des États de l’Afrique de l’Ouest (BCEAO’s) factoring law, which the Republic of Mali has adopted.
This conforms to the bank’s Factoring Strategy, which aims to provide legal and regulatory support to African countries in their pursuit of factoring as an alternative financing option.
The enactment of the law in Mali creates a facilitative legal and regulatory environment for factoring to thrive in the country, thereby supporting SMEs with access to another form of financing.
According to a statement, the move, which followed similar legislative developments in Togo, Niger and Burkina Faso, constituted a crucial milestone in the broader African effort to increase its share of global factoring transactions from its current level of around one per cent.
Moreover, Mali’s decision may well encourage other BCEAO’s Member States to adopt and domesticate the law.
Factoring offers an alternative trade finance instrument to African businesses, and therefore having a robust legal regime that promotes factoring will provide a major boost to the emergence and growth of SMEs and factoring companies in the Republic of Mali and beyond.
“By creating a legal infrastructure which diversifies SME financing, and provides credibility and assurance to investors, the law will significantly improve access to finance for previously excluded small and medium sized businesses in Mali,” it added.
Afreximbank’s Factoring Working Group led by Ms. Kanayo Awani, its Executive Vice-President, Intra-African Trade Bank, played a pivotal role in the development of the law. Commenting on the news, Awani, said: “Today’s news represents yet another momentous advancement for Africa’s thriving SME sector, and broadens the availability of finance to those with dynamism and entrepreneurship to start and expand businesses in the Republic of Mali.
“We are delighted that the Malian government is championing innovative forms of financing – and we are proud of our role in accelerating and facilitating this process.”
The 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.
