Afreximbank has called on Africa to expand its factoring volumes to at least €240 billion to support the growth of small and medium-sized enterprises (SMEs).
Mrs Kanayo Awani, Executive Vice President for Intra-African Trade and Export Development at Afreximbank and FCI Executive Committee member, made the statement during the bank’s annual Factoring Workshop in Abidjan, Côte d’Ivoire.
Factoring enables businesses to convert unpaid invoices into immediate cash, providing a solution to the $300 billion financing gap faced by African SMEs, which make up over 90% of businesses and contribute more than 60% of the continent’s employment and GDP.
Mrs Awani noted that Africa’s factoring market has more than doubled in recent years, rising from €21.6 billion in 2017 to €50 billion in 2024, but stressed that reaching €240 billion, around 10% of GDP, is essential to fully drive SME-led growth.
She said, “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.
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.”
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The workshop also highlighted factoring’s role in strengthening value chains. Mr Neal Harm, Secretary General of FCI, described factoring and supply chain finance as essential for unlocking SME growth, while Mr Charlie Dingui, Special Advisor to the National Director of BCEAO, emphasized its significance for socio-economic development in West Africa.
According to Nairametrics, Côte d’Ivoire alone offers a $5 billion factoring opportunity, particularly in sectors like cocoa, where timely finance supports millions of livelihoods.
Despite the potential, only 12% of SMEs currently access working capital from formal financial institutions, often relying on informal sources due to high costs, stringent requirements, and slow approvals.
Afreximbank’s Factoring Workshop is part of ongoing efforts to build expertise in factoring and supply chain finance across Africa, including initiatives such as the Certificate of Trade Finance in Africa (COTFIA), Afreximbank Academy programs, and FCI mentoring and online training, which have engaged over 5,000 delegates to date.
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Image Credit: Afreximbank
