The African Export-Import Bank (Afreximbank) has underscored the crucial role of factoring and supply chain finance (SCF) in narrowing Africa’s significant Small and Medium Enterprises (SME) financing gap, which is currently estimated at US$300 billion annually. Speaking at Afreximbank’s recent annual Factoring Workshop in Abidjan, Côte d’Ivoire, Kanayo Awani, Executive Vice President for Intra-African Trade and Export Development at Afreximbank, highlighted the necessity of scaling the market dramatically to unlock the continent’s transformative potential.
Awani noted that while Africa’s factoring volumes have more than doubled in recent years, rising from €21.6 billion in 2017 to €50 billion in 2024, and with nearly 200 factoring companies now operating, this growth remains insufficient. Given that SMEs account for over 90% of Africa’s businesses and more than 60% of employment and GDP, Awani asserted that to truly catalyze SME-led growth, Africa must scale its factoring volumes to at least €240 billion, a figure equivalent to about 10% of the continent’s GDP. Achieving this ambitious target, she stressed, will require increased financing, deeper legal reforms, expanded training, and strong industry partnerships.
Factoring, a trade finance mechanism, involves selling a company’s unpaid invoices (accounts receivable) to a third-party financial firm (a “factor”) at a discount for immediate cash. This mechanism is vital because it converts future payments into instant working capital, significantly improving cash flow and often offloading credit risk and collection duties. Charlie Dingui, Special Advisor to the National Director and representative of the Governor of the Central Bank of West African States (BCEAO), stressed its importance for socio-economic development across UEMOA member states, noting that factoring stimulates growth, particularly in environments marked by long payment delays and collection challenges. Neal Harm, Secretary General of FCI, called for strong partnerships and collaborative action to turn the workshop’s discussions into actionable transactions. The annual Factoring workshop, co-hosted with FCI, is part of a long-standing commitment to strengthening technical expertise on SCF and factoring, which are viewed as key enablers for advancing the implementation of the African Continental Free Trade Area (AfCFTA).
