The African Development Bank (AfDB) is to provide a $500,000 grant under its African Private Sector Assistance (FAPA) programme to support emerging small, medium businesses in Africa.
During the recently concluded Annual General Meetings and 25th anniversary celebrations of the African Export-Import Bank (AFREXIMBANK) in Abuja, the bank signed an agreement to formalise the grant.
The Managing Director, Intra-African Trade, AFREXIMBANK, Kanayo Awani, signed the agreement on behalf of her bank, while Senior Director, Nigeria Country Office, Ebrima FAAL, signed for the AfDB.
The ceremony was witnessed by Chargé d’Affaires, Embassy of Austria in Nigeria, Elfriede Geisler, and Ambassador of Japan to Nigeria, Yutaka Kikuta, who represented the FAPA donor countries.
Mrs Awani said the agreement was aimed at upgrading the capacity and skill-sets of up to 20 emerging factoring firms in the continent.
Besides, the agreement would also help in 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
This situation, he said, impeded their growth and prevented them from 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,” Mr Oramah said
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.
The agreement with the AfDB, and the grant from FAPA, he noted, would reinforce and grow the availability of effective factoring across the continent and increase awareness of its availability.
Details of activities the grant would finance include: capacity building to address needs, including on-site training, provision of back-office support systems and customised manuals for marketing, credit and risk policy, finance and operations.
Besides, the grant would support advisory services to established factoring companies and serve as a platform to enable African factoring companies to network, exchange ideas and share best practices.
The other activities include development of a sustainable knowledge and learning platform, e-learning, workshops and the certificate of finance in International Trade, which provides four weeks’ formal training in factoring under a programme developed by the University of Malta.
Also, the grant would help the provision of project management coordination to ensure timely project implementation.