African Export-Import Bank (Afreximbank) has congratulated the Republic of Congo for enacting a factoring law to support business activities.
According to the Bank, the move by the Republic of Congo constitutes a critical milestone in the Bank’s 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. The Bank therefore, stated that enabling this law will provide a major boost to the development and growth of SMEs in the Republic of Congo.
Also, by creating a legal infrastructure which supports diversification of SME financing, and by providing 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, Afreximbank highlighted in its congratulatory statement to the Republic of Congo.
Congo’s adoption of the Factoring Law to broaden financial options
Commenting on the news, Professor Benedict Oramah, President and Chairman of the Board of Directors of Afreximbank, said the move by the Republic of Congo is a step in the right direction to broaden financial options for businesses on the continent.
“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”.
Professor Benedict Oramah
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 were also acknowledged for their significant contributions and key roles.
Afreximbank’s role in promoting trade in Africa
African Export-Import Bank, a Pan-African multilateral financial institution mandated to finance and promote intra-and extra-African trade, 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.
As 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.
Moreover, Afreximbank is working with the AU and the AfCFTA Secretariat to develop an Adjustment Facility to support countries to effectively participate in the AfCFTA.
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