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 that supports the 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.
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