MODEL LAW ON FACTORING
Following the publication of the MLF, UNIDROIT has adopted a four-part implementation and promotion strategy.
The MLF has already been recognised as one of three key pillars of the “Financial Inclusion in Trade Roadmap” by the World Trade Board. Launched in April 2023, the “Financial Inclusion in Trade Roadmap” (FIT) is a framework designed to increase the participation of micro-, small- and medium-sized enterprises (MSMEs) in international trade. The World Trade Board was established in 2016 with the purpose of improving living standards by connecting trade, finance and technology. The FIT was developed as a collaborative project between the World Trade Board, the International Chamber of Commerce, the International Finance Corporation (IFC), the Bankers Association for Finance and Trade (BAFT), International Trade and Forfaiting Association (ITFA) and the FCI. The FIT is available at: https://worldtradesymposium.com/sites/wts/files/file/2023-03/financial-inclusion-in-trade-roadmap-2023.pdf.
The MLF has also already been acknowledged in the EBRD’s New Finance Support report (May 2023) which proposes a strategy to address liquidity and working capital issues currently affecting MSMEs around the world. As part of this strategy, the report recognises the MLF as a new international legal standard for receivables finance which can support access to credit for MSMEs in countries that implement the Model Law. The New Finance Report is available at: https://www.ebrd.com/what-we-do/sectors/legal-reform/access-to-finance.html