50 Years Facilitating Open Account - Trade Finance

“Promoting Factoring in Support of Intra-African Trade” 2017 Factoring Workshop

Monday 13 November 2017

FCI, the African Export-Import Bank (Afreximbank) and the African Capacity Building Foundation (ACBF) joined forces for the successfully held one-day Workshop on Factoring at Sal Island, Cape Verde on 9 November 2017 in the context of Afreximbank’s Advanced Structured Trade Finance Seminar held the same week.

The Workshop has been attended by nearly 100 delegates coming not only from African countries but also from Europe and Asia.

FCI Secretary General Mr.Peter Mulroy, FCI Education Director Mrs.Aysen Cetintas and FCI Education Officer Mr.Spyros Tsolis delivered presentations on the basic concepts of Factoring with special focus on the benefits of Factoring for SME’s. Moreover, case studies were also presented on Cross-border Factoring and Reverse Factoring that triggered an extensive discussion among delegates on the benefits of FCI Two-Factor system as well as on FCIReverse, the new service which soon will be available for FCI Members.

Of equal value were also the presentations delivered from industry experts on Credit Insurance, stressing on the symbiotic relationship that exists with Factoring. The panel discussions following the presentations elaborated more on this relationship and gave a valuable insight on the current status of Credit Insurance in Africa.

Kanayo Awani, Managing Director of Afreximbank’s Intra-African Trade Initiative and Chairman of the Africa Chapter of FCI, told participants that “despite new market opportunities opened up by the process of globalization and increased regional integration, SMEs continue to be constrained due to their lack of resources, their difficulties in achieving economies of scale and the higher transaction costs they face compared to large firms”.

“We are persuaded, though, that the solution to these challenges exist in rolling out effective and innovative financial products such as factoring,” she said.

Ms. Awani noted that Africa currently accounted for less than one per cent of the global factoring turnover, saying that the industry was largely dominated, at 60 per cent, by European factors whose turnover represented 10.4 per cent of the European Union’s GDP in 2016. That figure amounted to 1.5 trillion Euros.

To promote the emergence and growth of factors across Africa, Afreximbank provides dedicated lines of credit and offers technical assistance to players in the financial industry, she said. The Bank also provides legal advice to regulators using the Model Law on Factoring which it developed.

Ms. Awani added that Afreximbank had forged strong partnerships with leading institutions, such as FCI and ACBF, as part of its education and training activities.