The National Assembly, the lower chamber of the Cameroonian Parliament, adopted the first piece of legislation governing factoring activity in the country. The regulatory text had been proposed the week before by the government.
Defending the bill before members of parliament, the Cameroonian Minister of Finance, Alamine Ousmane Mey (photo) indicated that the law will diversify corporate financing mechanisms.
Already informally practiced in Cameroon, according to the Minister of Finance, factoring occurs when a corporate creditor sells its debt securities to a credit establishment referred to as a factoring institution for anticipated financing. The factoring institution will assume responsibility for the recovery of the debt while the initial creditor immediately receives funds.
Factoring, which, according to experts, is presented as an excellent alternative for companies in financial difficulty, cannot address the debt of individual customers and can only concern business between corporate entities.
The promulgation of this first factoring legislation by the President of Cameroon, is expected to take place 15 days after being adopted by the Parliament.
