Senegal’s parliamentary committees have unanimously approved a draft law aimed at formalising factoring services and improving access to credit for small and medium-sized enterprises (SMEs), a key segment of the country’s private sector.
The Finance, Economic Affairs and Law Committees of the National Assembly adopted draft law No. 09/2026 during a joint session, in a move lawmakers say will modernise the country’s financial framework and expand non-bank sources of financing.
The session was chaired by Chérif Ahmed Dicko and attended by senior government officials including Finance and Budget Minister Cheikh Diba and government spokesperson Marie Rose Khady Fatou Faye.
Factoring, a financial mechanism in which companies sell their trade receivables to financial institutions for immediate cash, has until now operated in Senegal without a dedicated legal framework, instead being loosely governed under a 2008 banking law.
The new legislation aligns Senegal with a uniform West African Monetary Union (UEMOA) framework, aimed at standardising financial services across the regional bloc.
More Read
Authorities say the reform is designed to unlock financing for SMEs, which account for 99.8% of businesses in Senegal but contribute only 30.4 percent of corporate turnover, according to national statistics.
Officials also note that around 70 percent of SMEs cite limited access to traditional bank credit as a major barrier to growth, highlighting structural weaknesses in the country’s financial intermediation system.
Under the new law, microfinance institutions will be authorised to offer factoring services, a change expected to broaden access to working capital, particularly for small firms outside major urban centres.
Finance Minister Cheikh Diba said the reform places SMEs at the centre of Senegal’s financial inclusion strategy, arguing that improved access to short-term liquidity will help strengthen business sustainability and growth.
He added that the factoring framework will complement a separate leasing law under preparation, with leasing aimed at financing long-term equipment investment while factoring addresses short-term cash flow needs.
Senegal’s banking sector remains relatively shallow compared with regional and continental peers, with credit penetration estimated at 31.1 percent of GDP.
That compares with 83.4% in Morocco and about 130% in South Africa, figures cited by lawmakers during parliamentary discussions as evidence of the country’s financing gap.
Lawmakers also raised questions during committee deliberations about the definition of eligible receivables and safeguards against overly aggressive debt recovery practices that could affect vulnerable small businesses.
Minister Diba said the government is open to incorporating parliamentary recommendations and pledged technical support to refine protections for borrowers before the bill proceeds to a final vote in the full National Assembly.
More Read
If adopted, the law is expected to deepen Senegal’s financial markets, diversify credit channels beyond commercial banks, and improve liquidity flows for SMEs across both formal and informal sectors.
The bill now moves to the plenary session of parliament for final consideration, where it is widely expected to be a key step in Senegal’s broader agenda to modernise its financial system and support private sector-led growth.
