The African Development Bank (AfDB) and African Export-Import Bank (Afreximbank) have sealed a pact to provide $500,000 grant to support emerging small, medium businesses in Africa under the African Private Sector Assistance (FAPA) programme.
The fund will be used in supporting emerging factoring firms in Africa.
The agreement was formalised during the recently concluded Annual General Meetings and 25th anniversary celebrations of the African Export-Import Bank (Afreximbank) in Abuja, with Managing Director, Intra-African Trade, Kanayo Awani, signing for Afreximbank, while Senior Director, Nigeria Country Office, Ebrima Faal, signed for AfDB.
In her remark, Awani said the grant is aimed at upgrading the capacity and skill-sets of up to 20 emerging factoring firms and providing advisory services to enhance the sustainability of established growth-orientated factoring firms, regulators, financial institutions and business and trade associations in Africa.
President of Afreximbank, Benedict Oramah, said small and medium enterprises (SMEs) in Africa have long faced real difficulties accessing external finance for their business activities, which has impeded their growth and prevented them from pursuing commercial opportunities.
Oramah stated: “SMEs in Africa have long faced real difficulties accessing external finance for their business activities and this has impeded their growth and prevented them pursuing commercial opportunities. Afreximbank sees factoring as a solution to bridge the funding gap facing SMEs, and the agreement will support our strategy to grow Intra-African trade and facilitate greater SME contribution to regional and global supply chains.”
He said the bank was championing the development of factoring in Africa by focusing on the provision of credit lines to factors, capacity-building workshops, policy and regulatory inputs, advisory services and technical assistance to promote best practices.
Oramah added that the agreement would reinforce and grow the availability of effective factoring across the continent and increase awareness of its availability.