Africa must increase its factoring volumes to at least €240 billion to support small and medium-sized enterprises, according to Afreximbank. The bank made the position known through Mrs. Kanayo Awani, Executive Vice President for Intra-African Trade and Export Development, during its annual Factoring Workshop in Abidjan.
Okay News reports that Awani said factoring remains one of the most effective tools for closing the US$300 billion financing gap facing African SMEs. She explained that the continent’s factoring market grew from €21.6 billion in 2017 to €50 billion in 2024, but activity still falls far below what is required for meaningful SME-led growth.
Awani said factoring allows businesses to turn unpaid invoices into immediate cash, helping them operate smoothly and grow. She noted that although SMEs account for more than 90% of Africa’s businesses and over 60% of employment and GDP, only a fraction have access to affordable working capital.
Experts at the workshop also highlighted factoring as a key driver of stronger value chains. FCI Secretary General Neal Harm said supply chain finance is essential for unlocking SME capacity, while Charlie Dingui of the BCEAO added that the tool plays a crucial role in West Africa’s economic development. Côte d’Ivoire alone holds a $5 billion factoring opportunity, particularly in cocoa.
The bank noted that only 12% of SMEs seek formal working-capital loans due to strict requirements and slow approvals. Afreximbank said it is expanding training, technical support, and regulatory capacity-building to speed up adoption across the continent. More than 5,000 participants have benefited from its programs to date.
Africa’s factoring growth, the bank said, is necessary to support the millions of young people entering the labour market each year, adding that expanded SME financing tools remain critical for the success of the African Continental Free Trade Area.
