Africa Must Scale Factoring Volumes to €240 Billion to Unlock SME Growth — Afreximbank

FintechTodayNews reports that the African Export-Import Bank (Afreximbank) has emphasized the urgent need for Africa to expand its factoring volumes to at least €240 billion if the continent is to close its widening SME financing gap and accelerate economic growth.

The call was made by Mrs. Kanayo Awani, Executive Vice President of Intra-African Trade and Export Development at Afreximbank and a Member of the FCI Executive Committee. She delivered the message during Afreximbank’s annual Factoring Workshop in Abidjan, Côte d’Ivoire, according to a statement published on the bank’s official website.

Factoring Is Critical for Closing Africa’s US$300 Billion SME Financing Gap

Mrs. Awani stressed that factoring — a financial service that allows businesses to convert unpaid invoices into instant cash — is essential for addressing the US$300 billion funding gap holding back African small and medium-sized enterprises.

She noted that while SMEs make up over 90% of Africa’s businesses and contribute more than 60% of employment and GDP, access to affordable capital remains severely limited.

“To catalyse SME-led growth, Africa must scale factoring volumes to at least €240 billion, or about 10% of the continent’s GDP,” Awani said. “Achieving this requires increased financing, deeper legal reforms, expanded training, and strong industry partnerships.”

Africa’s Factoring Market Is Growing—But Still Far Below Potential

According to Afreximbank:

• Factoring volumes have more than doubled, rising from €21.6 billion in 2017 to €50 billion in 2024.

• Almost 200 factoring companies currently operate across the continent.

• Despite this growth, the continent’s factoring activity remains far below what is needed to drive large-scale SME transformation.

FCI Secretary-General Mr. Neal Harm added that factoring and supply chain finance are “essential for unlocking SME productivity,” while BCEAO Special Advisor Mr. Charlie Dingui highlighted their importance for strengthening economic resilience in West Africa.

Côte d’Ivoire Example: A $5 Billion Factoring Opportunity

Afreximbank’s statement highlighted Côte d’Ivoire as a strong example of Africa’s untapped potential.
The country’s factoring opportunity is estimated at $5 billion, especially in sectors like cocoa, where quick access to capital can determine the livelihood of millions.

However, a major challenge persists: only 12% of SMEs seek working capital from formal financial institutions.
High interest rates, tough collateral requirements, and slow approval processes push many entrepreneurs toward informal lenders.

Afreximbank Expands Training and Capacity-Building

The Factoring Workshop in Abidjan forms part of Afreximbank’s long-term initiative to build Africa’s capacity in factoring, supply chain finance, and AfCFTA-aligned trade finance systems.

So far, the bank’s programs have achieved:

• 5,000+ delegates trained through over 25 capacity-building initiatives

• Courses such as COTFIA (Certificate of Trade Finance in Africa)

• Partnerships with FCI on mentoring and online training

• Expanded technical support for regulators to strengthen factoring supervision

• Financing tools and global frameworks to grow local factoring companies

Key Things to Know (FintechTodayNews Summary)

• Africa’s factoring market grew from €21.6B (2017) to €50B (2024).

• SMEs face a US$300B financing gap, limiting growth and employment capacity.

• Only 12–15 million young Africans can be absorbed yearly without increased SME financing tools.

• Afreximbank plans new support for regulators, factoring firms, and regional supply chain operators.

• Factoring must scale to €240 billion (10% of Africa’s GDP) to unlock sustainable SME expansion.