Good times are here for Small and Medium Scale Enterprises (SMEs) in Africa as African Export-Import Bank (Afreximbank) partners the African Development Bank (AfDB) to provide a $500,000 grant scheme through the AfDB’s African Private Sector Assistance (FAPA) programme.
The grant would enable the advancement of 20 emerging factoring firms in the continent and increase their financing opportunities.
Factoring is a financial transaction and a type of debtor finance, in which a business sells its accounts receivable to a third party called a factor at a discount. A business will sometimes factor its receivable assets to meet its present and immediate cash needs.
Afreximbank had introduced a model law on factoring to provide a benchmark for African national legislatures’ enacting arrangements.
During Afreximbank’s yearly meetings and 25th anniversary celebrations in Abuja, Afreximbank President, Dr. Benedict Oramah, said:
“the agreement will support our strategy to grow Intra-African trade and facilitate greater SME contribution to regional and global supply chains.”
The agreement was signed on behalf of Afreximbank by the Managing Director of Intra-African Trade, Kanayo Awani, while the Senior Director, Nigeria Country Office, Ebrima FAAL, signed for the AFDB.
The signing was in the presence of Chargé d’Affaires, Embassy of Austria in Nigeria, Elfriede Geisler, and Ambassador of Japan to Nigeria, Yutaka Kikuta, who represented the FAPA donor countries.
In July, 2018, Nigeria got 40 percent of Afreximbank $65 billion loan syndications for trade financing and development intervention for being the largest stakeholder and donor of the bank. The 40 percent was expected to cover public investments and private sector working capital particularly, the banks.
The African Export Import Bank (Afreximbank) was established in Abuja, Nigeria in October, 1993 by African Governments, African private and institutional investors as well as non-African financial institutions and private investors for the purpose of financing, promoting and expanding intra-African and extra-African trade. The Bank was established under the twin constitutive instruments of an Agreement signed by member States and multilateral organisations, and which confers on the Bank the status of an international multilateral organisation; as well as a Charter, governing its corporate structure and operations, signed by all shareholders.
The Bank, headquartered in Cairo, commenced operations on September 30, 1994, following the signature of a Headquarters Agreement with the host Government in August, 1994. It has branch offices in Harare, Abuja, Abidjan and Nairobi.