Following the launch of the GLEIF Digital Business Identity Initiative, which aims to close the trade finance gap in Africa, GLEIF have been talking to their key partners about how the project will improve the financial inclusion of SMEs on the continent and beyond.
All over the world, small and medium-sized enterprises (SMEs) lack the legal documentation with which to identify themselves to banks, service providers and other businesses. As a result, millions of them struggle to obtain trade finance and enter into partnerships, especially in developing countries.
Following the launch of the GLEIF Digital Business Identity Initiative, which aims to address this gap in trade finance in Africa, GLEIF have been talking to their key partners about how the project will improve the financial inclusion of SMEs on the continent and beyond.
GLEIF spoke to Alberta Abbey, LEI Analyst, Data & Analytics, LSEG, to discuss how this initiative will support the wider adoption of globally recognized corporate identities in the form of Legal Entity Identifiers (LEIs) across Africa and how more companies in Africa can be encouraged to obtain LEIs.
LSEG plays an important role in the global LEI system as an LEI issuer, also known as a Local Operating Unit (LOU). LEI issuers are accredited by GLEIF to issue LEIs to legal entities, provide registration, renewal and other services, and act as the primary interface of the LEI system to legal entities. They also work with validation agents, a new operating model within the system that allows financial institutions to obtain and maintain LEIs for their clients to support their issuance workflows.
What role did LSEG play in this flagship initiative?
As the organization that issues the LEI, we provide training and ongoing support to the African validation agent.
Why did you decide to participate in the initiative?
LSEG joined this initiative to promote wider adoption of LEI in Africa. By demonstrating the benefits and advantages of LEIs, we want this project to encourage more companies across Africa to obtain LEIs. We started the project with a partnership approach, which we intend to continue beyond the pilot project.
As the second-largest issuer of LEIs in the world, this project is a good opportunity to work with the African agent to make LEIs more accessible across the continent.
As an LEI issuer in the African LEI Initiative, what benefits does LSEG hope to gain from its participation, both for itself and for the banks and SMEs in the region?
We are happy to collaborate with NMB Bank, which is the validation agent. By working together, we are providing the platform that will enable companies in the region to obtain LEIs, making their status internationally verifiable through GLEIF.