LEIs Unlock Financial Inclusion For African SMEs
An international flagship project designed to expand financial inclusion among small to medium-sized enterprises (SMEs), especially on the African continent, has launched today.
The project has been realized with the support of the German Federal Government through the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH.
The collaborative initiative is equipping SMEs across Africa with globally recognized business identities in the form of Legal Entity Identifiers (LEIs). The LEI is comparable to an international company ID card; it contains good quality business card and ownership structure information about a legal entity which can be verified quickly and efficiently by anyone, anywhere, enabling organizations to know precisely with whom they are doing business. The verifiable company data results in transparency in the marketplace and builds greater trust between market participants.
Supplying LEIs to African SMEs aims to strengthen financial inclusion in the region by enabling them to apply for trade finance and establish contractual, regulated agreements with banks, payment networks, and trading partners, leading to broader access to financial services and greater participation in both domestic and international markets. Ultimately, the initiative intends to strengthen Africa’s SME base and increase the flow of inbound capital needed to fuel the continent’s economic development.
The LEI can create a more transparent, efficient cross-border exchange of goods and data under the African Continental Free Trade Area. This is the first step toward greater financial inclusion and overcoming the challenges associated with access to trade finance in Africa. Considering the high pace of digitization and regulatory development across the African continent, the LEI is a great natural fit. It is a compelling, ready-to-go cross-border solution for entity identification that is open, reliable, and easily integrated into regulatory frameworks.”
Source: https://www.finextra.com/pressarticle/88876/leis-unlock-financial-inclusion-for-african-smes
