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Access to finance projects and news

Developing the Model Law on Factoring with UNIDROIT

The EBRD's Legal Transition Team (LTT) experts are observing members to the UNIDROIT working group on the Model Law on Factoring. The principal objective of the Model Law on Factoring is to facilitate the efficient financing of receivables. If effectively transposed and implemented, the provisions of the Model Law on Factoring should result in a national legal system that is predictable and provides protections that are more effective to debtors, creditors, and factors. By substantially reducing legal risks and due diligence costs, the Model Law on Factoring has the potential to have a large impact on economic growth by reducing the cost of credit and improving its availability. LTT is contributing to the work of the working group with its extensive expertise in factoring and secured transactions, developed over the years and a number of successfully delivered reforms across the EBRD economies.

Armenia – Support with the investment-based crowdfunding regulation

In 2018, the EBRD's Legal Transition Team (LTT), at the request of the Central Bank of Armenia, initiated a project to provide technical assistance with secondary legislation in relation to crowdfunding activities. Having analysed an investment-based crowdfunding regulatory regime proposed by the Central Bank, a gap analysis and recommendations were prepared with the assistance of international and local experts.

In February 2022, the Board of the Central Bank of Armenia approved a package of by-laws regulating investment-based crowdfunding services based on LTT’s recommendations. Under these regulations, entrepreneurs, including start-ups and SMEs, will be able to attract up to AMD 2.5 billion of financing annually from investors via crowdfunding platforms through the sale of securities in a simplified manner, without extensive transparency requirements (e.g․ prospectus and other disclosures). An outreach event on this project is planned to be held in Yerevan in early 2023.

Jordan – Improving legal literacy and access to finance for women entrepreneurs

In 2019, the EBRD's Legal Transition Team (LTT) launched a technical assistance project to train women entrepreneurs in Jordan on legal literacy and tools to access finance and better manage their businesses. The capacity building activities cover the following topics: regulations affecting women entrepreneurs across sectors; basics of market economy, management skills resource planning, marketing and sales strategies; different tools in the Jordanian economy for women entrepreneurs to utilise to access finance in the banking and non-banking sectors; mediation efforts and other legal aid/services to support women entrepreneurs to resolve their disputes; and regulations in commercial/business/tax law that affect women entrepreneurs.

In November 2020, 3 pilot sessions were delivered to 32 beneficiaries divided into the following topics: (1) starting a business; (2) growing and developing a business; (3) business resilience, following which an e-learning course was launched in November 2022. The programme can be accessed free of charge here with the code LLJO.

In 2023, there will be further webinars featuring successful entrepreneurs sharing their business journeys.

Egypt – MSME support programme and the Social Fund for Development

At the request of the Social Fund for Development of Egypt (now Micro, Small and Medium Enterprise Development Agency – MSMEDA), the EBRD's Legal Transition Team (LTT) prepared a report on coordination of MSME policy-making in Egypt and advocacy roles of MSME agencies. Subsequently, we helped pilot one stop shops, where most of external public service providers are represented and have a client/server operation to allow them to serve clients promptly and efficiently.

The project supported MSMEDA in procuring ICT infrastructure/hardware, equipment, including servers, storage and security for one stop shops.

Kosovo – Star Ventures MDA

In 2020, the EBRD's Legal Transition Team (LTT) and the Advice to Small Business (ASB) team, at the request of the Innovation Centre of Kosovo (ICK), initiated a project to advice on the operational, legal/regulatory and technical aspects of setting-up a reward-based crowdfunding platform in Kosovo.

In 2021, the LTT and ASB – together with the ICK and our international experts -produced a report elaborating the structure and governance of a reward-based crowdfunding platform. The report provides a clear guidance on how to establish a reward-based crowdfunding platform which will ensure that the start-ups who find it difficult to access funds from traditional sources, may tap into the ‘crowd’ to finance their manufacturing, operational or other needs. The ICK is yet to implement the platform but the report produced has replicative potential in other countries.

Georgia – Exploring the potential of using distributed ledger technology (DLT) to improve government services

In 2019, the EBRD's Legal Transition Team (LTT), at the request of the Ministry of Justice of Georgia, initiated a project aimed to outline the specific opportunities for using blockchain in public service delivery by detailing a comprehensive set of use cases for each agency under the Ministry.

For this project, LTT studied the services delivered by agencies under the Ministry and devised potential use cases where blockchain can be deployed and add value to public services. As a result, in January 2021, a study outlining the potential applicability of distributed ledger technology in improving efficiency of public services rendered by the Ministry was produced. The study will serve as an important policy guideline for the Ministry to choose and develop its next blockchain projects.

Poland – Improving the regulatory framework to facilitate digitisation of government services

In 2019, the EBRD's Legal Transition Team (LTT), at the request of the Ministry of Digital Affairs of Poland, initiated a project to raise awareness among the government stakeholders about the benefits of cloud solutions and guide the public authorities in Poland on procuring cloud-based IT solutions.

LTT developed a new system for the Polish government that was endorsed by the Office of the Prime Minister into the Guidelines on Government Cloud Computing and the Model Service Level Agreement (defining the level of service expected from external service providers) in 2021. The Guidelines are expected to improve government practices by facilitating the uptake of cloud computing among the Polish public authorities. The government is already making progress in this direction and has revamped the cloud procurement tool for public authorities.

Morocco – Support with the crowdfunding regulation

In 2018, the EBRD's Legal Transition Team (LTT), at the request of the Ministry of Finance of Morocco, initiated a project to support the review of the draft Crowdfunding Law and other implementing legislation, prepared by national authorities.

LTT reviewed the crowdfunding law drafted by the Ministry of Finance by leveraging the findings in a crowdfunding benchmarking study earlier prepared by EBRD. The crowdfunding study on best practices for regulating investment- and lending-based crowdfunding platforms was aimed at helping lawmakers across EBRD’s countries of operations to become more comfortable with the formulation of a crowdfunding framework, which in turn should give legitimacy to crowdfunding platforms, while ensuring adequate protection of investors. The Moroccan House of Representatives unanimously adopted bill No. 15-18 on crowdfunding in 2021, developed with the support of the EBRD. Some of the secondary legislative instruments have also been approved and others are pending approval. We are now assisting the Ministry of Finance with preparing practical guides so to build awareness in the public and among the entrepreneurs and financial institutions about crowdfunding as a product.

Turkey – Support with the crowdfunding secondary legislation

In 2018, the EBRD's Legal Transition Team (LTT), at the request of the Capital Markets Board of Turkey (CMB), initiated a project to provide technical assistance with secondary legislation related to specific issues and procedures arising out of crowdfunding activities. With the support from local and international consultants, LTT reviewed draft secondary legislation prepared by CMB on equity-based crowdfunding and advised the CMB on the best practices around the regulation of debt-, donation- and reward-based crowdfunding.

LTT assisted the CMB with drafting the Equity-Crowdfunding Communique, which was adopted by the CMB and published in the Official Gazette on 4 October 2019. The Communique aims at promoting the development of equity-based crowdfunding platforms as alternative sources for access to finance and ensuring that the necessary consumer-protection measures are in place. The team also held a public event on the advantages and opportunities that the new Communique will bring, as well as international perspective on crowdfunding. Ever since the Communique came into force, eight (8) equity-based crowdfunding platforms have been licensed by the CMB.

Kazakhstan – Regulatory framework for mobile and digital banking services

In 2019, the EBRD's Legal Transition Team (LTT), at the request of the Astana Financial Service Authority (AFSA) - the regulatory authority for the financial activities of the Astana International Financial Centre (AIFC), initiated a project to provide technical assistance with the regulatory framework for mobile and digital banking services. With the assistance of international legal consultant, LTT is building on the existing regulatory framework in order to support the licensing of digital-only banks, to regulate banking services provided remotely (e.g. online; in a mobile app) and to introduce 'Open Banking' in AIFC.

The new legal framework (which is pending adoption) will provide regulatory certainty to firms providing banking services, and to their clients. It will also promote new and innovative ways for banking services to be provided in the AIFC, making it an attractive location for both local and international providers of such services.

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