bitcoin and litecoin 1xbet
Business News

African SMEs: How to ease access to finance – Afreximbank

Benedict Oramah, Afreximbank's boss
Benedict Oramah, Afreximbank’s boss

The African Export-Import Bank (Afreximbank) has urged all African SMEs to engage factoring as a viable and sustainable solution to address the challenge of access to financing for their businesses.

This is contained in a statement issued on Tuesday by Mr Obi Emekekwue, Director and Global Head of Communications and Events Management at Afreximbank,

Emekekwue quoted Ms Kanayo Awani, Managing Director of the Intra-African Trade Initiative at Afreximbank, as saying that poor engagement of factoring had hindered the growth of Africa’s Small and Medium-scale enterprises (SMEs).

Factoring is a financial transaction and a type of debtor finance in which a business sells its accounts receivable to a third party at a discount.

A business will sometimes factor its receivable assets to meet its present and immediate cash needs.

Awani said that factoring was an important alternative to other trade financing sources such as bank loans.

She wondered why SMEs in most African countries were shying away from this because Africa accounted for less than one  per cent of global factoring volumes in 2017 inspite of  its huge opportunities.

According to her, the factoring volumes of Euro 22.3 billion as at 2017 are engaged by SMEs in South Africa, Tunisia, Morocco, Egypt, Mauritius and Kenya.

She said that Africa’s factoring volumes were projected to reach about Euro 200 billion by 2021, resulting mostly from new market entrants supported by the sustained economic growth and rapid rise of Africa’s middle class.

Awani  also said: “Other factors that could raise factoring volumes include emergence of innovative industries supported by technological advancements; rapidly expanding trade and economic relations between Africa and major economies in the South; and increasing focus on regional integration and intra-regional trade under the African Continental Free Trade Agreement.

“Afreximbank has facilitated the growth of factoring in Africa through various interventions, including supporting the creation of a facilitative legal and regulatory environment for factoring.

“It has provided finance and guarantees to factoring companies; provision of technical assistance; and formation of strategic partnerships to promote the development of factoring.”

Afreximbank is the foremost pan-African multilateral financial institution devoted to financing and promoting intra- and extra-African trade.

The institution was established in October 1993 by African governments, African private and institutional investors and non-African investors.

Since 1994, it had  approved more than $67 billion in credit facilities for African businesses, including $7.2 billion in 2018.

Afreximbank has a total asset of $11.9 billion as at Dec. 31, 2017 and is rated BBB+ (GCR), Baa1 (Moody’s) and BBB- (Fitch).

Let’s block ads! (Why?)

Choose Which Assets to Trade
Deposit
Receive

Bitcoin Market Price Chart in RealTime

Source: NAN

loading...


Get News Update Daily - It is Your Right


Most Trending News On Sleekarena

Frankie Bridge flaunts abs in bikini as she joins sister Victoria for beach day in Miami

Military pension: Centre commends FG over reforms

Buy Kraken Crypto Exchange Shares with BnkToTheFuture Investment Opportunity

Advertising Coin (ADVC Token): Legit Cryptocurrency Investment?

Bitfury Collaborates With Kazakhstan’s AIFC For Blockchain Implementation Across Multiple Industries

loading...
Buy or Sell Bitcoin and Litecoin
To Top