The African Export and Import Bank (Afreximbank) has again called for resilient legislative framework in various African nations that will enhance the development of factoring in the continent.
This call was made during the Afreximbank's sensitisation seminar on "Model Law on Factoring" in Nairobi, Kenya last weekend. The seminar gathered over 40 representatives of central banks, regulatory bodies, legislative authorities, commercial banks, law firms and factoring companies across Africa.
The Managing Director of Afreximbank's Intra-African Trade Initiative, Kanayo Awani made it known that strengthening legislation is critical to promoting the growth of factoring which will help address the issue of limited access to finance faced by Africa's Small and Medium-sized Enterprises (SMEs).
With strong legislative support for factoring in African nations, Africa's SMEs will have enhanced access to elusive and much-needed finance. It will enable exporters or suppliers sell their 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.
Afreximbank will be providing technical support, advisory services and funding facilities to national banks and accredited factoring companies in order to increase the use of factoring as an alternative trade finance instrument available to SMEs in Africa.