Africa Needs €240bn For SME-led Transformation, Says AfreximBank

Afreximbank has highlighted the critical importance of factoring and supply chain finance (SCF) in narrowing Africa’s Small and Medium Enterprises (SMEs) financing gap and building resilient value chains across the continent.

Speaking at Afreximbank’s recent annual Factoring Workshop in Abidjan, Côte d’Ivoire, Kanayo Awani, executive vice president, Intra-African Trade and Export Development (IAED) at Afreximbank and member of the FCI Executive Committee, noted that although Africa’s factoring volumes have more than doubled in recent years, increasing from €21.6 billion in 2017 to €50 billion in 2024, and with nearly 200 factoring companies now operating across the continent, current activity remains significantly below Africa’s transformative potential.

In trade finance, factoring refers to selling a company’s unpaid invoices (accounts receivable) to a third-party financial firm (a “factor”) at a discount for immediate cash. This turns future payments into instant working capital, improving cash flow, and often offloading credit risk and collection duties.

Awani said that although SMEs account for more than 90 per cent of Africa’s businesses and over 60 per cent 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 per cent of the continent’s GDP,” said Awani. “Achieving this will require increased financing, deeper legal reforms, expanded training and strong industry partnerships.”

Also speaking at the workshop, Neal Harm, secretary general of FCI, said that factoring and supply chain finance are critical to unlocking SME growth in Africa, calling for practical solutions, strong partnerships, and collaborative action to turn the day’s discussions into tomorrow’s transactions.

Representing Dr. Jean-Claude Kassi Brou, Governor of the Central Bank of West African States (BCEAO), Charlie Dingui, Special Advisor to the National Director, stressed the importance of SME financing for driving socio-economic development across UEMOA member states.

“By enabling businesses to convert their accounts receivable into immediate liquidity, factoring improves cash flow and stimulates growth, particularly in environments marked by long payment delays and collection challenges,” said Dingui.

The annual Factoring workshop is part of Afreximbank and FCI’s long-standing commitment to expanding awareness and strengthening technical expertise on factoring and supply chain finance, which are key enablers for advancing the implementation of the African Continental Free Trade Area (AfCFTA).