November 1 (SeeNews) - The European Bank for Reconstruction and Development (EBRD) said on Wednesday that the Montenegrin government has significantly improved the regulatory framework for financial leasing and factoring activities.
The recently adopted law on financial leasing will align with international best practices the activities of financial leasing, factoring, purchase of claims, micro-credit and credit-guarantee issues, the EBRD said in a statement.
The adoption of the law follows support by the EBRD’s Legal Transition Team in drafting the sections on factoring and leasing sections of the law. Both are attractive financial instruments which to date have not been sufficiently used by Montenegrin businesses, the bank said.
"The EBRD has a well-established track record in supporting legal reform in areas such as promoting access to finance, particularly in assisting with the development of legal and regulatory systems for alternative financial structures such as leasing and factoring," Jaap Sprey, EBRD Head of Montenegro, said. "The new law introduces the regulation and legislation needed to ensure the stability of the market and legal efficiency of transactions while not putting undue regulatory burden on the industry."
The leasing provisions of the new law will provide a more robust framework for leasing operations. The introduction of new legislation on factoring is expected to guarantee the stability of the market, Montenegrin finance minister Darko Radunovic said in the statement.
Jelena Madir, EBRD Director, Legal Transition Team, said that the new law should create the environment for the development of factoring and leasing activities, which should ultimately facilitate and improve small and medium-sized enterprises’ (SMEs) access to finance.
Since the start of its operations in Montenegro, the EBRD has invested more than 500 million euro ($581.9 million) in the country through more than 50 projects. In Montenegro, the EBRD focuses on enhancing the competitiveness of the private sector, supporting sustainable practices in the tourism and property sectors and promoting energy security and efficiency on a regional level.