The Africa Export-Import Bank (AfreximBank) has highlighted the critical importance of factoring and Supply Chain Finance (SCF) in narrowing Africa’s Small and Medium Enterprises (SMEs) financing gap and building resilient value chains across the continent.
Speaking at the bank’s annual Factoring Workshop in Abidjan, Ivory Coast, Executive Vice President, Intra-African Trade and Export Development (IAED), Afreximbank, Kanayo Awani, noted that although Africa’s factoring volumes had more than doubled in recent years, increasing from €21.6 billion in 2017 to €50 billion in 2024 and with nearly 200 factoring companies now operating across the continent; current activities remains significantly below Africa’s transformative potential.
She added that though SMEs accounted for more than 90 per cent of Africa’s businesses and over 60 per cent of employment and Gross Domestic Product (GDP), they continued to face a financing gap estimated at $300 billion annually.
According to her, only 12–15 million young Africans entering the labour market each year could be absorbed without expanded SME financing tools.
“To catalyse SME-led growth, Africa must scale factoring volumes to at least €240 billion, equivalent to about 10 per cent of the continent’s GDP. Achieving this will require increased financing, deeper legal reforms, expanded training and strong industry partnerships,” she said.
Also speaking, Secretary General of FCI, Neal Harm, said that factoring and supply chain finance were critical to unlocking SME growth in Africa, calling for practical solutions, strong partnerships, and collaborative action to turn the day’s discussions into tomorrow’s transactions.
Representing the Governor of the Central Bank of West African States (BCEAO), Dr. Jean-Claude Kassi Brou, the Special Advisor to the National Director, Charlie Dingui, stressed the importance of SME financing for driving socio-economic development across UEMOA member states.
“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,” he said.
Côte d’Ivoire, for instance, he posited, presented a significant opportunity to boost economic development by expanding its factoring market, he noted.
The country’s factoring and supply chain finance sector is estimated to have a potential of $5 billion, yet only 12 percent of MSMEs currently seek working capital from formal financial institutions, relying instead on informal sources largely due to high financing costs, perceived MSME risk, strict loan requirements and slow approval processes, he added.
He explained that the annual factoring workshop was part of the bank and FCI’s long-standing commitment to expanding awareness and strengthening technical expertise on factoring and supply chain finance, key enablers essential to advancing the implementation of the African Continental Free Trade Area (AfCFTA).
