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Promoting Factoring in Africa
Promoting Factoring in Africa

From November 15 to 21, 2021, the 2nd Inter-African Trade Fair (IATF 2021) was organized by Afreximbank in Durban (South Africa).

According to the latter, this fair is a trade show that provides a platform for sharing information on trade, investments, markets and allows buyers and sellers, investors, and countries to meet, discuss, and conclude trade agreements. This is an opportunity for exhibitors to showcase their products and services, engage in business-to-business (B2B) exchanges, and conclude trade agreements. It is also a unique and valuable platform for businesses to access an integrated market of over 1.2 billion people with a GDP of over USD 2.5 trillion created under the AfCFTA.

On this occasion, FCI was keen to be present and visible to promote factoring in all its forms as a development tool for SMEs that help boost economies within inter-African trade. Accordingly, FCI and, in collaboration with Afreximbank, chair of the Africa Chapter initiative, organized two Breakfast meetings.

Day 1: Boosting African trade through factoring, this event brought together governments officials, regulators, central bankers, and other officials from Africa to get up to date information on what is happening on the continent, examine the impact AfCFTA will have on the necessity for SME'S to have access to liquidity, and the vital role factoring will play in the future.

Day 2: It gathers banks and financial institutions to get up-to-date information on what is happening on the continent, examine the impact AfCFTA will have on the necessity for SMEs to have access to liquidity, and the vital role factoring will play in the future.

We had important contributions from business experts who spoke to us about the opportunities and challenges they face, and here is a list; Mr. Onyebuchi Memeh, Executive Director & Head of Trade, Transaction Banking, South Africa & Southern Africa at Standard Chartered S.A; Mr. Hope Yongo, CEO's advisor to the Nexim Bank Nigeria, Mr. Gavin Tarr, Head of Debtor Finance, FirstRand Bank S.A.; Mr. William Murwisi, Managing Director, Olympia Factors Commercial, Botswana.

On the FCI stand, we were honoured by the visit of Professor Benedict Oramah - President of Afreximbank, and Madame Kanayo Awani, Managing Director of IATI of Afreximbank.

This event made it possible to receive more than a thousand visitors and banks who wanted to know more about the factoring business and the implementation of the model law in the respective countries in particular: Senegal, Ivory Coast, South Africa, Zimbabwe, Mauritania, Cameroon, Congo, DRC, Nigeria, Guinea, Sierra Leone, Egypt, Angola, Algeria, Burkina-Faso, etc. Despite the context of the Covid-19, the promotional actions carried out in West Africa during this year and during the IATF 2021 have started to bear fruit in Côte d'Ivoire and Nigeria with the adoption projects Factoring law, so we hope for positive results in 2022. In addition, we met more than a dozen banks that have expressed their interest in becoming a member of the FCI network and launched Factoring business and products: Domestic Factoring, Reverse Factoring, and International Factoring.

The primary needs expressed are focused on training, capacity building, support, and coaching banks and Factors to launch Factoring activities. FCI Academy has solutions to meet these needs through FCI E-Learning courses and its consultants who have more than 20 years of experience in the business. In addition, all these initiatives are dependent in several countries on the absence of a clear and conducive legal framework to give better visibility to banks and potential investors to embark on this activity.

With the current context of post-Covid-19 recovery, Factoring appears to be an ideal tool for relaunching and accelerating intra-African trade in the coming years in Africa.