Multinational - Afrexim Bank - Regional promotion of factoring in Africa

The proposed project is a US$500,000 grant from African Private Sector Assistance (FAPA) to support the development of factoring firms in Africa. The project is aimed at promoting the development of ‘factoring’ as an alternative trade finance instrument in Africa. The investment confirms the African Development Bank’s commitment to support extra- and intra-Africa trade promotion. Indeed, SMEs in Africa have long faced real difficulties accessing external finance for their business activities and this has impeded their growth and prevented them pursuing commercial opportunities. The African Export-Import Bank (Afreximbank) sees factoring as a solution to bridge the funding gap facing SMEs, and the agreement will support its strategy to grow intra-African trade and facilitate greater SME contribution to regional and global supply chains. Afreximbank has become a reputable and solid regional development finance institution, meeting significant financing needs in trade development and trade finance in Africa. Afreximbank will contribute US$450,000 towards the technical assistance project. This is especially so in the trade finance space.