Afreximbank is calling for a major scale-up of Africa’s factoring market, saying the continent must expand volumes to at least €240 billion if it wants to close the persistent financing gap holding back millions of small and medium-sized enterprises. The bank’s Executive Vice President for Intra-African Trade and Export Development, who also sits on the Executive Committee of FCI, made the appeal during Afreximbank’s annual Factoring Workshop in Abidjan. She explained that factoring, which enables businesses to unlock cash from unpaid invoices, remains one of the strongest tools for addressing the US$300 billion funding shortfall faced by African SMEs.
According to Afreximbank, factoring adoption is rising, with the market growing from €21.6 billion in 2017 to €50 billion in 2024. Despite this progress, activity still falls far short of the continent’s needs. To catalyse SME-led development, factoring volumes must hit the €240 billion mark, equivalent to about 10 percent of Africa’s GDP. The bank stressed that achieving this goal will require stronger financing commitments, deeper legal reforms to support receivables-based lending, expanded training, and more coordinated partnerships across the ecosystem. Nearly 200 factoring companies operate in Africa, yet the industry remains underutilized compared to its potential impact.
The workshop also highlighted factoring’s growing relevance in strengthening value chains. Officials from FCI and the BCEAO noted that supply chain finance is becoming essential for boosting productivity, especially in key export sectors. Côte d’Ivoire alone presents a €5 billion factoring opportunity, particularly within the cocoa industry, where millions of producers depend on quick access to working capital. However, only about 12 percent of SMEs on the continent currently approach formal financial institutions for working capital, largely due to high costs, rigid requirements, and slow approval processes. As a result, many businesses still rely on informal lenders, limiting their ability to scale.
Afreximbank’s ongoing capacity-building efforts form a critical part of its strategy to expand the factoring landscape. More than 5,000 delegates across Africa have already benefited from over 25 training initiatives, including the Certificate of Trade Finance in Africa, the Afreximbank Academy, and FCI’s mentoring programmes. These interventions are designed to equip regulators, financial institutions, and factoring companies with the knowledge, tools, and oversight frameworks needed to strengthen the industry.
For African MSMEs, a stronger factoring market could be transformative. It promises faster access to working capital, reduced dependence on collateral-based lending, and a more resilient financial ecosystem that supports trade under the African Continental Free Trade Area. As youth populations rise and demand for jobs grows, Afreximbank says expanding SME financing tools like factoring is central to positioning Africa’s businesses for sustained, inclusive economic growth.
