The Bank of Algeria has issued a new directive on October 7, outlining the regulatory framework for factoring activities conducted by banks and financial institutions. Factoring allows businesses to transfer their commercial debts to a financial institution, which provides immediate payment in exchange for a fee, while assuming the risk of non-payment. The directive mandates a formal written contract defining terms such as party identities, debt nature, liability limits, and termination clauses. Institutions are required to assess the financial status of both the client and the debtor prior to any agreement. Eligible commercial debts are restricted to those owed by debtors residing in Algeria. Once the transfer is formalized, all rights and guarantees associated with the invoices are legally shifted to the financial intermediary.