African Export-Import Bank (Afreximbank) allocated $150m fund for Africa’s factoring activities until 2021, according to managing director of Intra-African Trade Initiative and chairperson of the African Chapter of FCI, Kanayo Awani.
Awani told Daily News Egypt that there are no specific allocations for Egypt to support factoring activities in the country, however, the bank is ready to finance more factoring activities in the country.
She pointed out that the bank is financing banks and non-banking institutions and only $10m of the allocated fund were spent, adding that the factoring is growing up and increasing.
Awani noted that the bank is based on several pillars in promoting factoring in the continent, first is financial intervention through providing lines of credit and also guarantees.
“There are five countries in Africa that are factoring actively, 80% of the Afreximbank’s finance goes to South Africa and the other 20% goes for four countries Egypt, Morocco, Tunisia, and Mauritius,” she said adding, “moreover, the bank is providing awareness and building capacity of SMEs through FCI.”
She pointed out that a group of companies do suffer a lot, due to some economic issues, noting that about 53% of SMEs applying for loans or funds get refused; nevertheless, around 79% of corporations applying for funds succeed in getting money.
Therefore, the Afreximbank is working on finding an alternative way to finance through factoring, as it is a specific product that enhances liquidity of the system to provide trade financing for SMEs, according to Awani.
Regarding legal situation in Egypt in factoring and SMEs sectors, Awani elaborated that the recent revision for some legislation is very good, praising the Central Bank of Egypt’s initiative for supporting SMEs.