The African Export-Import Bank (Afreximbank) has called on African governments and financial institutions to expand factoring markets with a target of €240 billion annually, arguing that such scale is needed to meet the working-capital demands of small and medium enterprises.
Afreximbank officials said that current factoring activity is inadequate to support SMEs’ cash-flow needs, leading to over-dependence on traditional loans at high interest rates. They added that scaling up factoring would lower borrowing costs, stabilise supply chains, and improve trade competitiveness.
The bank urged governments to enact supportive regulations, establish credit guarantee schemes, and encourage partnerships between traditional banks and fintech firms to facilitate efficient receivables financing.
Also Read: Afreximbank Posts Strong 2024 Results Amid Global Economic Headwinds
Afreximbank maintained that boosting factoring would drive export growth, create jobs, and foster economic resilience.
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