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The Role of AFREXIMBANK in
Promoting Factoring in Africa
By
Mr. Teddy NGIDJOL
Manager, Trade Finance and Branches
(AFREXIMBANK)
Presentation at Afreximbank ‘s Seminar on Factoring
Lusaka , Zambia
November 07, 2014
The Trade Finance Bank for Africa
Table of Contents
1.
In this presentation I will be discussing what
AFREXIMBANK is doing to promote factoring in Africa.
2.
Highlight its collaboration with the African Development
Bank (AfDB).
3.
Conclude with recommendations.
The Trade Finance Bank for Africa
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1. What AFREXIMBANK is doing to promote factoring in
Africa.
The Trade Finance Bank for Africa
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1. What AFREXIMBANK is doing to Promote Factoring
in Africa?
A.
Provision of Lines of Credit for Factoring.
B.
Educational Activities / Raising Awareness.
C.
Facilitating Infrastructure.
D.
Trade
Association
Platform
(Providing
Support
through International Factors Group - IFG).
The Trade Finance Bank for Africa
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A. Provision of Lines of Credit for Factoring
 The purpose of the facility is to provide
liquidity and payment risk protection.
 AFREXIMBANK is currently reviewing
proposals at different stages of
processing for factoring lines of credit
totaling US$50 Million. Companies are
based in Mauritius Senegal, Burkina
Faso,
Kenya,
Botswana,
Egypt,
Zimbabwe and Rwanda.
The Trade Finance Bank for Africa
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B. Educational Activities / Raising Awareness
To deal with the lack or very limited knowledge of the product across
the continent:

The Bank has been facilitating the sharing of experiences
between local members in Africa and
engaging in public
relations activities designed to raise local awareness of the
benefits of factoring.

The Bank has also been implementing educational activities to
develop skills in Factoring across the continent and build
capacities.
The Trade Finance Bank for Africa
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B. Educational Activities / Raising Awareness (Cont’d)
The Bank has hosted the following Workshops and Seminars:
 In December 2010, the Bank held a workshop in Cairo, Egypt on the theme:
“factoring operations for Beginners”.
 In December 2011, the Bank held a workshop in Accra, Ghana on the theme:
“Achieving Success Through Factoring”.
 In November 2013, the Bank held a workshop in Douala, Cameroon on the
theme: “Factoring as an Alternative Trade Finance Instrument in a competitive
World”.
 This year, in June 2014, the Bank held
a seminar targeting Regulators & Law
Makers in Lagos, Nigeria on the theme:
“Promotion and Development of Factoring
in Africa: Towards a Facilitative Legal
and Regulatory Environment”.
The Trade Finance Bank for Africa
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B. Educational Activities / Raising Awareness (Cont’d)
 On September 30, 2014 AFREXIMBANK
facilitated an Africa Business Forum in which
several
African
Factoring
Companies
participated during the International Factors
Group (IFG) 52nd Annual Meeting in Malta.
The Forum focused on: “The Challenges and
Opportunities for Factoring in Africa”.
 AFREXIMBANK sponsored a Dinner /
Speaking event on September 29, 2014 that
included a key note presentation by Mrs.
Margrith Lutsch-Emmenegger (President of
Fimbank) on the theme: “Opportunities for
Factoring in Africa-Fimbank Experience”.
The Trade Finance Bank for Africa
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C. Facilitating Infrastructure
To alleviate the cost of setting up Factoring business platforms and
challenges around the lack of expertise in back-office and receivables
management:
 AFREXIMBANK
is working on a co-Branded Factoring
Development product called “AfriFactor” in partnership with
members of the International Factors Group (IFG).
 “AfriFactor” will aim at providing advisory services for establishing
Factoring business, IT and Operations platforms to African
Financial Institutions desiring to commence or enhance their
Factoring businesses.
The Trade Finance Bank for Africa
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C. Facilitating Infrastructure (Cont’d)
AFREXIMBANK is also working on improving the weak legal
environment compounded by the high cost of perfecting legal
documents:
 AFREXIMBANK is coordinating with
other stakeholders including Central
Banks, Association of African Central
Banks (AACB) and OHADA Secretariat
for the drafting of a model Factoring
Law that we hope to introduce in
countries where we are beginning to see
Factors emerging.

AFREXIMBANK is exempt from stamp duties due to its Preferred
Creditor Status in its Member Countries.
The Trade Finance Bank for Africa
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D. Trade Association Platform (Providing Support
through IFG Network)
 IFG is today recognized as the representative Trade Association for the
Factoring and the Asset Based Finance Industry with focus on Education
and Events, Industry Information, regular News and Newsletters, and
promotion of the 2-Factor System.
 The Bank has been working with IFG to seize the opportunities
factoring can offer while at the same time mitigating the difficulties in
the market.
 The Bank is a member of the International
Factors Group (IFG) (as Shareholder). Dr. B. O.
Oramah (Executive Vice President) sits on its
Board and is also the current Chair of IFG’s
Africa Chapter.
The Trade Finance Bank for Africa
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D. Trade Association Platform (Providing Support
through IFG Network) (Cont’d)
The Bank leverages on IFG to:
 Connect: Service providers with members and
align
with
like-minded
organisations
to
facilitate broader industry reach. They identify
factors that will be opened to entering into Joint Venture
Arrangements with Africa Chapter Members to accelerate start-up
operations. They also connect Factors to promote the 2-Factors
System.
 Educate: Inform, educate and support the industry in order to set
standards and best practice.
 Influence: Lobby on behalf of the industry – promote and defend the
industry working closely with regulators and governments worldwide.
The Trade Finance Bank for Africa
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D. Trade Association Platform (Providing Support
through IFG Network) (Cont’d)
The Bank helps to mobilize members and the current
membership of the IFG (Africa Chapter) is as follows.
11 Members have been
mobilized as at date.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
AFREXIMBANK
CIM Finance, Mauritius
Commercial Factors Ltd., Mauritius
Maroc Factoring, Morocco
Tunisie Factoring SA, Tunisia
First International Bank (SL) Ltd., Sierra Leone
Harare receivable Exchange Zimbabwe *
Egypt Factors, Egypt
Cairo Factors, Egypt
Locafrique, Senegal*
Gulf Bank Algeria
*Approved in 2014
And discussions are underway for the processing of
membership of more than 10 prospects.
The Trade Finance Bank for Africa
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D. Trade Association Platform (Providing Support
through IFG Network) (Cont’d)
CURRENT MEMBERSHIP OF THE AFRICA CHAPTER
Maroc Factoring
Egypt Factors
Cairo Factors
Tunisie Factoring
Gulf Bank Algeria
Locafrique Senegal
FIB Sierra Leone
Harare Receivables
Exchange
Zimbabwe
The Trade Finance Bank for Africa
CIM Finance Mauritius
Commercial Factors Mauritius
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2. Collaboration with the African Development Bank
(AfDB).
The Trade Finance Bank for Africa
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2. Collaboration with the African Development Bank
(AfDB)
AFREXIMBANK is working with the African Development Bank
Thematic Fund for Private Sector Assistance (FAPA) to support
Factoring companies in Africa.
 Grants under FAPA are used to promote innovative programs
that specifically support small - and micro - scale enterprises,
including the provision of seed money for start-ups, business
incubators, etc.
 AfDB has pre-approved a grant that will be applied towards:
 Technical capacity building ;
 Drafting of a model law;
 Advocacy (Training, Workshop, Conferences, etc.)
The Trade Finance Bank for Africa
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2. Collaboration with the African Development Bank
(AfDB) (Cont’d)
 AfDB and AFREXIMBANK in this collaboration, have
identified 10 pilot companies to benefit from the grant in the
area of capacity building.
 Due Diligence programmes are on-going and the first mission
covering East and Southern Africa was held between May 16th
to 20th, 2014.
 The second mission to cover North, West and Central Africa is
expected prior to implementation.
 Final approval is expected by the end of 2014.
The Trade Finance Bank for Africa
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3. Conclusions
The Trade Finance Bank for Africa
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3. Conclusions
 What we would like you to take away is the impetus AFREXIMBANK
is adding through raising awareness, education, public relations,
providing credit facilities, lobbying, various partnerships arrangements
for technical assistance For emerging factoring companies, you can look
to AFREXIMBANK as your partner in progress.
 We also urge you all especially the Law Makers and Regulators
represented here to partner with us in our goals towards enabling the
environment for the success of factoring and invariably promotion of
SME financing. The removal of regulatory impediments and improving
the legal environment is a key success factor.
The Trade Finance Bank for Africa
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THANK YOU FOR YOUR ATTENTION
The Trade Finance Bank for Africa
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