Kampala, 14 October 2022 – Over 150 participants attended the African Export-Import Bank (Afreximbank) Factoring Workshop 2022, organized in collaboration with FCI in Kampala, Uganda, on October 6. Held alongside the Afreximbank Trade Finance Seminar, the theme of the conference was “Factoring, the liquidity solution for SMEs”.
In her statement at the opening of the conference, Mrs. Kanayo Awani, Afreximbank Executive Vice president, Intra-African Trade Bank, welcomed the encouraging level of growth in factoring in Africa.
“As a result of combined efforts of all stakeholders – factors, SMEs, Governments, Central Banks, and the dogged resolve of Afreximbank, new factoring businesses are emerging in Africa and financing to SMEs is increasing. Factoring volumes in Africa continue to grow increasing from EUR 25 billion in 2020 to over EUR 32 billion in 2021, representing 28.1% growth,” she said.
“The job is however not done,” Mrs. Awani continued, noting that 51% of SMEs still cannot access sufficient financing, while 28.3% cannot access any financing at all.
To provide liquidity in support of SMEs, Afreximbank offers factoring credit lines to African factors through banks and independent factors and also issues guarantees in favour of African factors in instances where the factors are seeking funding from local banks and other financiers. Afreximbank has provided over US$100 million in direct liquidity support to factoring since 2017.
Mr. Peter Mulroy, Secretary General of FCI, said that “receivables are a very strong reliable asset class that are self-liquidating, can be controlled, and through factoring is a means by which SMEs can generate the necessary working capital to allow them to survive and flourish.”
“FCI travels around the world to spread the word about factoring and receivables finance in general, influencing governments, and promoting the concept of financing against receivables, something new in most of the emerging markets we visit, who are accustomed to financing only against real estate or fixed assets,” added Mulroy. “We know when factoring is conducted based on FCI’s best practices, members do not suffer especially when it is conducted the right way.”
Also speaking, Mr Richard Mayebo, Executive Director, Information Technology at Bank of Uganda, representing Dr Michael Atingi-Ego, Deputy Governor of the Bank of Uganda, said that “SMEs are the main drivers of economic growth and employment in many countries and Uganda is certainly no exception. They account for over 90% of private sector production and are also the main source of employment. However, SMEs continue to face barriers in accessing strategic resources such as finance, skills, and technology. They are also hampered by inadequacies in the legal and regulatory framework. Tackling these issues will gradually enable us to unleash and fully harness the potential of the SMEs.”
“I commend Afreximbank for championing efforts to promote factoring on the continent. I hope that this workshop will provide solutions that will see factoring adopted as a viable financing option for SMEs in Uganda,” concluded Richard Mayebo.
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About Afreximbank
African Export-Import Bank (Afreximbank) is a Pan-African multilateral financial institution mandated to finance and promote intra-and extra-African trade. Afreximbank deploys innovative structures to deliver financing solutions that support the transformation of the structure of Africa’s trade, accelerating industrialization and intra-regional trade, thereby boosting economic expansion in Africa. A stalwart supporter of the African Continental Free Trade Agreement (AfCFTA), Afreximbank has launched a Pan-African Payment and Settlement System (PAPSS) that was adopted by the African Union (AU) as the payment and settlement platform to underpin the implementation of the AfCFTA. Afreximbank is working with the AU and the AfCFTA Secretariat to develop an Adjustment Facility to support countries in effectively participating in the AfCFTA. At the end of 2021, the Bank’s total assets and guarantees stood at about US$25 billion, and its shareholder funds amounted to US$4 billion. Afreximbank disbursed more than US$51 billion between 2016 and 2021. The Bank has ratings assigned by GCR (international scale) (A), Moody’s (Baa1), Japan Credit Rating Agency (JCR) (A-) and Fitch (BBB). The Bank is headquartered in Cairo, Egypt.