Afreximbank’s Model Law on FactoringWorld Factoring Yearbook 2017
David B. Tatge, a Member of the Firm in the Corporate Services, Health Care and Life Sciences, and Litigation practices, in the firm’s Washington, DC, office, authored an article in the World Factoring Yearbook, titled “Afreximbank’s Model Law on Factoring.”
Following is an excerpt (see below to download the full ebook in PDF format):
The African Export-Import Bank (“Afreximbank” or the “Bank”) has long had as a goal and priority the promotion of factoring as a product which can help facilitate the provision and growth of trade finance in Africa to and among small and medium sized enterprises (SMEs), and larger companies as well. In this regard, the Bank’s activities that are focused on dealing with some of the major challenges to expanding factoring in Africa ecognised, among other things, the notable absence of factoring laws and regulations in most African states. In this process, the Bank became familiar with the various model laws on factoring which have been promulgated over the years; most particularly, those prepared by UNIDROIT (1988), UNCITRAL (2001), and IFG (2014). The Bank, with and in appreciation of these prior bodies of work, determined to prepare its own model law because it felt that: (1) the process of doing so would itself significantly raise the profile of factoring and trade finance in Africa, (2) certain modifications to the existing model laws, discussed below, would further facilitate the spread of factoring and trade finance across the continent and (3) a model law would present a common framework to start from as African countries work to enact factoring legislation across the Continent. Ultimately, Afreximbank’s model law for factoring was launched at the first annual meeting of the combined FCI in Cape Town, South Africa on October, 2016.