The African Export-Import Bank says it has provided $48 million lines of credit to African factoring companies in the last two years.
This was disclosed in a statement by Benedict Oramah, Afreximbank’s executive vice president in charge of Business Development and Corporate Banking, on Thursday in Lagos.
Factoring is not a loan but a cash-management tool of choice for many companies, and is one of the oldest forms of business financing.
Mr. Oramah, who spoke at a symposium on factoring in Africa in Cairo, was quoted as saying that the support was to give liquidity and payment risk protection in the companies’ factoring activities.
The two-day symposium was organised by the Egyptian Factoring Association, the Financial Services Institute and the International Factors Group.
According to him, the amount comprised $23 million granted to factors located in Mauritania and $25 million to several others based in Senegal.
He announced that Afreximbank currently had factoring lines totalling $50 million under assessment for institutions in Burkina Faso, Kenya, Egypt, Botswana, Rwanda, and Zimbabwe.
Mr. Oramah said that Afreximbank had supported the development of factoring in Africa through educational events and fostering the creation of facilitative infrastructure.
He said that Afreximbank would soon introduce a co-branded factoring development product called AfriFactor, to reduce costs incurred by African factors in setting up factoring business platforms.
“Besides, AfriFactor will address challenges around the lack of expertise in back-office and receivables management,” he said. “It will provide advisory services to African financial institutions seeking to commence or enhance their factoring businesses, and provide support in such areas as establishing factoring businesses, information technology and operations platforms.”
Mr. Oramah added that Afreximbank was also working with the African Development Bank’s Thematic Fund for Private Sector Assistance to support factoring companies in Africa.
According to him, the partnership uses FAPA grants that target innovative programmes for small and micro-scale enterprises.
He said that a grant has been pre-approved for technical capacity building, drafting of a model law, and for advocacy, including training, workshops and conferences.
Mr. Oramah said Afreximbank had organised seminars, trainings and workshops across Africa, targeting bank officials, lawmakers and regulators, to encourage interest in factoring as an alternative trade finance instrument for companies.
Afreximbank is a foremost Pan-African multilateral financial institution devoted to financing and promoting intra-and extra-African trade.