Factoring services launched by Algerian banks to provide immediate business liquidity

Algerian banks have started implementing factoring services, a financial mechanism designed to allow businesses to turn their commercial invoices into immediate cash flow. This initiative follows the establishment of a comprehensive legal framework by the Bank of Algeria, specifically through regulation 03-26 and instruction 09-26. The Banque Extérieure d'Algérie inaugurated this service by signing initial contracts on October 25th. This mechanism addresses the chronic issue of long payment deadlines that hinder corporate activity, as banks now purchase trade receivables in exchange for a fee, assuming the collection risks. The contracts include mandatory clauses regarding the financial assessment of the parties involved, with the requirement that invoices must be undisputed and not exceed a six-month maturity period.