Factoring firms receive $48 million Afreximbank support
The African Export-Import Bank (Afreximbank) provided lines of credit amounting to $48 million to African factoring companies in the last two years to give them liquidity and payment risk protection in their factoring activities, Dr Benedict Oramah, Executive Vice President of the Bank in charge of Business Development and Corporate Banking, has said.
Speaking in Cairo during a two-day symposium and academy on Factoring in Africa, Dr. Oramah said that 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.
Dr. Oramah said that Afreximbank was supporting the development of factoring in Africa through the organisation of awareness raising activities, including educational events, and through the fostering of the creation of facilitative infrastructure.
To help reduce costs incurred by African factors in setting up factoring business platforms and to address challenges around the lack of expertise in back-office and receivables management, Afreximbank was working to introduce a co-branded factoring development product called AfriFactor, he stated.
According to him, AfriFactor will provide advisory services to African financial institutions seeking to commence or enhance their factoring businesses and would provide support in such areas as establishing factoring businesses, information technology and operations platforms.
Afreximbank is also working with the African Development Bank’s Thematic Fund for Private Sector Assistance (FAPA) to support factoring companies in Africa, using FAPA grants that target innovative programmes for small and micro-scale enterprises, he continued. According to him, a grant has already been pre-approved for technical capacity building, drafting of a model law, and for advocacy, including training, workshops and conferences.
Dr. Oramah said that Afreximbank had organised seminars, trainings and workshops across Africa, targeting bank officials, law makers and regulators, to encourage interest in factoring as an alternative trade finance instrument for companies.
The symposium and academy on Factoring in Africa is being organised by the Egyptian Factoring Association, the Financial Services Institute and the International Factors Group.