Afreximbank has identified factoring and supply chain finance (SCF) as critical tools for narrowing Africa’s persistent SME financing gap and strengthening value chains across the continent.
Speaking at Afreximbank’s annual Factoring Workshop in Abidjan, Côte d’Ivoire, the bank’s Executive Vice President for Intra-African Trade and Export Development, Kanayo Awani, said despite recent growth, factoring activity in Africa remains far below its true potential for supporting small and medium-sized businesses.
Awani noted that Africa’s factoring volumes have more than doubled in recent years, rising from €21.6 billion in 2017 to about €50 billion in 2024, with nearly 200 factoring companies now operating across the continent. However, she stressed that this level of activity is still insufficient to drive large-scale SME growth.
SMEs account for over 90 per cent of businesses in Africa and contribute more than 60 per cent of employment and GDP, yet they face an estimated annual financing gap of about $300 billion.
“To unlock SME-led growth, Africa must scale factoring volumes to at least €240 billion, roughly 10 per cent of the continent’s GDP,” Awani said, adding that this would require stronger financing frameworks, legal reforms, capacity building and closer industry collaboration.
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Factoring allows businesses to convert unpaid invoices into immediate cash by selling them to a financial institution at a discount, helping SMEs manage cash flow challenges caused by delayed payments and limited access to traditional credit.
Also speaking at the event, FCI Secretary General, Neal Harm, described factoring and supply chain finance as practical tools for unlocking SME growth, urging stakeholders to move from discussions to real transactions through stronger partnerships.
Representing the Governor of the Central Bank of West African States (BCEAO), Charlie Dingui highlighted the role of SME financing in driving economic development across UEMOA countries, noting that factoring helps businesses overcome liquidity constraints in markets with long payment cycles.
The annual workshop forms part of Afreximbank and FCI’s broader efforts to deepen awareness and technical capacity around factoring and supply chain finance, seen as important enablers for SMEs to participate more effectively in intra-African trade under the AfCFTA.
