Afreximbank, FCI Host Factoring Conference to Boost Africa SMEs
The conference concluded with plans for factoring roundtables at upcoming Afreximbank and FCI events in the Bahamas, South Korea and Namibia throughout June 2024.
HARARE, Zimbabwe-- In a concerted effort to promote factoring as a viable financing solution for Africa's small and medium-sized enterprises (SMEs), the African Export-Import Bank (Afreximbank) and FCI jointly organized a two-day regional factoring conference in Harare, writes Baboloki Semele.
Convened under the theme "Empowering Economic Growth Through Innovative Factoring and Receivables Finance Solutions," with a sub-theme of "How Factoring Can Catalyze Financial Inclusion for SMEs," the April 22-23 event drew over 200 attendees.
It spotlighted the pivotal role SMEs could play in boosting intra-African trade under the African Continental Free Trade Agreement (AfCFTA).
"Factoring is a vital alternative financing avenue for SMEs," said Kanayo Awani, Afreximbank's Executive Vice President of Intra-African Trade and an FCI board member.
"Despite global recognition, factoring adoption in Africa remains modest, representing less than 1% of global volumes."
Awani highlighted Afreximbank's efforts, including a model factoring law adopted by seven countries and over $100 million in financing, which helped double Africa's factoring volumes from €21.6 billion in 2017 to €41.8 billion in 2023.
However, she underscored "the persistent challenge of the substantial SME finance gap and low factoring volumes in Africa."
FCI Secretary General Neal Harm echoed those concerns, stressing "the critical role of open account trade finance in facilitating SME growth and local economies."
He cited 2023 data showing factoring grew 13.5% in Africa year-on-year to €47.48 billion, but still just 1.3% of the global total.
Dr. J.T. Chipika, Deputy Governor of Zimbabwe's central bank, welcomed the timely conference as the country adopts a new monetary policy framework.
"Afreximbank's ongoing support in promoting factoring in Zimbabwe is particularly crucial in an economy where SMEs contribute significantly to GDP, with a noteworthy portion being women-owned," Chipika said.
She emphasized the need for macroeconomic stability to enable factoring's success, "underlining Afreximbank's pivotal role in supporting Zimbabwe's macroeconomic stability."
The conference concluded with plans for factoring roundtables at upcoming Afreximbank and FCI events in the Bahamas, South Korea and Namibia throughout June 2024.