Afreximbank has said Africa must expand its factoring volumes to at least €240 billion to boost small and medium-sized enterprises (SMEs).
Mrs Kanayo Awani, Executive Vice President, Intra-African Trade and Export Development at Afreximbank and Member of the FCI Executive Committee, made the remark at Afreximbank’s annual Factoring Workshop in Abidjan, Côte d’Ivoire, according to a statement on the bank’s website on Tuesday.
She highlighted that factoring, which allows businesses to convert unpaid invoices into immediate cash, is a key tool for addressing the US$300 billion financing gap faced by African SMEs, which account for more than 90% of businesses and contribute over 60% of employment and GDP across the continent.
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 to fully drive SME-led growth, factoring volumes must reach €240 billion, or about 10% of the continent’s GDP. Despite nearly 200 factoring companies operating across Africa, activity still falls short of its transformative potential.
“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,” She said.
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The statement also highlighted the role of factoring in building resilient 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 the BCEAO, emphasized its importance for socio-economic development in West Africa.
Côte d’Ivoire, for example, offers a $5 billion opportunity in factoring, particularly in sectors such as cocoa, where millions of livelihoods depend on timely access to finance, the statement noted.
Yet, only 12% of SMEs currently seek working capital from formal financial institutions, with many relying on informal sources due to high costs, strict requirements, and slow approvals.
The Afreximbank Factoring Workshop is part of the bank’s ongoing effort to raise awareness and build expertise in factoring and supply chain finance, critical for advancing the African Continental Free Trade Area (AfCFTA).
To date, more than 5,000 delegates have participated in over 25 capacity-building initiatives, including the Certificate of Trade Finance in Africa (COTFIA), Afreximbank Academy programs, and FCI mentoring and online training schemes.
What you should know
Africa’s factoring volumes have grown from €21.6 billion in 2017 to €50 billion in 2024, indicating rising adoption across the continent.
- SMEs on the continent face a financing gap of over US$300 billion, limiting their access to affordable working capital.
- Only 12–15 million young Africans entering the labour market each year can be absorbed without expanded SME financing tools, according to Afreximbank.
Afreximbank and partners plan to support regulators with technical training and capacity building to strengthen oversight of factoring.
Financing support and global operational toolkits are being extended to factoring companies to help expand the industry’s reach, the bank has revealed.
