The Bank of Algeria has released new instructions regarding the practice of factoring by banks and financial institutions, aiming to regulate corporate financing mechanisms and trade debt transfers. Dated October 7, 2026, and signed by Governor Mohand Bouray, the directive clarifies the implementation of the regulation issued on August 13, 2026. Factoring is defined as a process where a creditor assigns trade receivables to a financial entity in exchange for immediate payment, with the provider bearing the non-payment risk for a fee. According to the directive, institutions must conduct a financial assessment of both the client and the debtor before signing a formal contract. This agreement must specify contractual obligations, payment terms, financing limits, and procedures for contract termination.