In order to promote factoring as a viable financing option for Africa’s small and medium-sized enterprises (SMEs) and enhance their participation in intra-regional trade and industrialization, the African Export-Import Bank (Afreximbank) and FCI recently organized a two-day factoring conference in Harare.
The conference, held on April 22-23, focused on the theme of “Empowering Economic Growth Through Innovative Factoring and Receivables Finance Solutions” with a sub-theme of “How factoring can serve as a catalyst for the financial inclusion of SMEs”. The event emphasized the significant role SMEs are expected to play in intra-African trade under the African Continental Free Trade Agreement (AfCFTA). Co-organized with FCI, the global body for factoring, the conference aimed to facilitate discussions and strategic initiatives to promote and improve factoring within the Southern Africa region.
Kanayo Awani, Executive Vice President of Intra-African Trade and Export Development Bank at Afreximbank and a board member of FCI, highlighted the importance of factoring as an alternative financing option for SMEs. She noted that there is great potential for factoring to support economic growth in Africa, as evidenced by the growth in factoring volumes in the region from EUR 21.6 billion in 2017 to EUR 41.8 billion in 2023.
Neal Harm, Secretary General of FCI, emphasized the importance of open account trade finance in supporting SMEs and local economies. He mentioned the significant trade finance gap globally and highlighted the reliability of receivables as assets that can generate working capital for SMEs.
The conference was well-timed for Zimbabwe and Southern Africa to explore opportunities in unlocking sustainable finance through factoring. The importance of macroeconomic stability in supporting factoring and receivable financing was also emphasized.
Factoring Roundtables will be organized during upcoming events to further promote factoring in Africa and beyond.
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