The African Export-Import Bank (Afreximbank) has declared that Africa’s factoring volumes must surge to at least €240 billion to effectively bridge the financing gap facing Small and Medium Enterprises (SMEs) and drive economic transformation across the continent.
The call was made during Afreximbank’s annual Factoring Workshop in Abidjan, where the bank highlighted the critical role of supply chain finance in building resilient value chains.
Mrs. Kanayo Awani, Executive Vice President, Intra-African Trade and Export Development at Afreximbank, acknowledged the sector’s significant growth, noting that factoring volumes have more than doubled from €21.6 billion in 2017 to €50 billion in 2024. The continent is now home to nearly 200 factoring companies.
However, Awani warned that current activity levels remain insufficient given the scale of the need.
“Although SMEs account for more than 90% of Africa’s businesses and over 60% of employment and GDP, they continue to face a financing gap estimated at US$300 billion annually,” Awani stated.
“To catalyse SME-led growth, Africa must scale factoring volumes to at least €240 billion, equivalent to about 10% of the continent’s GDP. Achieving this will require increased financing, deeper legal reforms, expanded training and strong industry partnerships.”
The workshop highlighted specific opportunities in the host nation, Côte d’Ivoire, where the factoring and supply chain finance sector holds an estimated potential of US$5 billion. Despite this, only 12% of SMEs in the country currently seek working capital from formal financial institutions.
Mr. Charlie Dingui, Special Advisor to the National Director of the Central Bank of West African States (BCEAO), emphasized that factoring is essential for environments plagued by payment delays.
“By enabling businesses to convert their accounts receivable into immediate liquidity, factoring improves cash flow and stimulates growth, particularly in environments marked by long payment delays and collection challenges,” Dingui said.
Also speaking at the event, Mr. Neal Harm, Secretary General of FCI, the global representative body for factoring and financing of open account domestic and international trade receivables, called for practical solutions to turn discussions into transactions.
The workshop is part of a broader strategy by Afreximbank and FCI to support the African Continental Free Trade Area (AfCFTA) by training over 5,000 delegates to date on trade finance instruments.