By Staff Reporter
African Export-Import Bank (Afreximbank), Egyptian Factoring Federation (EFF) and FCI co-hosted a regional promotion workshop in Cairo, Egypt on 24 October 2022 on factoring and receivables finance in partnership with the Financial Regulatory Authority (FRA).
The workshop was themed “Empowering Sustainable Trade Flows with Factoring – Facilitation of Egyptian Trade in Difficult Times”.
The event was attended by over 150 participants, including factors, commercial banks and other government officials. Gracing the occasion was Mr. Gamal Moharam, Chairman of the EFF; Dr. Islam Azzam, Vice Chairman of FRA; and Mr. Peter Mulroy, Secretary General of FCI. Also in attendance was a 9-member delegation from Nigeria Export-Import Bank (NEXIM) and Central Bank of Nigeria (CBN) who were on a study tour in Egypt to learn how the authorities developed facilitative regulatory environment and policy interventions that have ensured the growth of factoring in Egypt.
In her welcome remarks, delivered on her behalf by Mr. Enga Kameni, Senior Manager, Legal at Afreximbank, Mrs. Kanayo Awani, Afreximbank’s Executive Vice President, Intra-African Trade Bank, commented that whilst Afreximbank and other key stakeholders continue to promote factoring as a viable financing option for SMEs in the continent, it remains relatively low in Africa compared to other regions. Indeed, the continent accounted for about about one per cent of a US$ 3.5 trillion market in 2021. Supporting capacity building in factoring, providing financing to emerging and established factors as well as establishing and leveraging partnerships were key to the development and growth of factoring. Such support, which the Bank is championing will invariably lead to access of much needed financing by SMEs.
Also speaking, Mr. Mulroy, in his opening remarks, endorsed this view saying that factoring is one of the most important financial tools that can be deployed in any market because it has a direct correlation to supporting SMEs who are the engines of growth in every economy. Factoring also provides the necessary liquidity to SMEs by enabling the liquidation of their receivables which today averages about 40% of the total assets of any seller’s balance sheet.
Dr. Azzam spoke about some of FRA’s initiatives around factoring, including the amendment of the banking law that allows factoring companies to deal with government agencies; Green Factoring which helps finance receivables from companies in environmental and sustainability sectors; and the creation of a subsidiary, whose role is to help finance non-banking activities such as factoring, leasing and mortgages. These initiatives have been key to the growth of factoring volumes in Egypt, making Egypt one of the market leaders in factoring in Africa.
African Export-Import Bank (Afreximbank) is a Pan-African multilateral financial institution mandated to finance and promote intra-and extra-African trade. Afreximbank deploys innovative structures to deliver financing solutions that support the transformation of the structure of Africa’s trade, accelerating industrialization and intra-regional trade, thereby boosting economic expansion in Africa. A stalwart supporter of the African Continental Free Trade Agreement (AfCFTA), Afreximbank has launched a Pan-African Payment and Settlement System (PAPSS) that was adopted by the African Union (AU) as the payment and settlement platform to underpin the implementation of the AfCFTA. Afreximbank is working with the AU and the AfCFTA Secretariat to develop an Adjustment Facility to support countries in effectively participating in the AfCFTA. At the end of 2021, the Bank’s total assets and guarantees stood at about US$25 billion, and its shareholder funds amounted to US$4 billion. Afreximbank disbursed more than US$51 billion between 2016 and 2021. The Bank has ratings assigned by GCR (international scale) (A), Moody’s (Baa1), Japan Credit Rating Agency (JCR) (A-) and Fitch (BBB). The Bank is headquartered in Cairo, Egypt.
For more information, visit: www.afreximbank.com.
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About Egyptian Factoring Federation (EFF)
Established as a non-profit independent entity. In accordance with the decision of the Board of Directors of the Financial Regulatory Authority No. 150 of 2019 dated November 21, 2019 and includes companies working in the field of financial factoring in Egypt.
The EFF is Contributing in the development of financial factoring activities, raising awareness of it, and adopting initiatives that support the factoring activities. We Communicate with international and regional federations to exchange experiences in financial factoring activities. We are Ensuring that the factoring federation members implement the code of ethics and the rules regulating the obligations and rights of the members.
The EFF is Organizing training courses with the aim to develop the skills of workers in the financial factoring activities, whether through the Federation or through other parties. We Work to protect the rights of members and remove obstacles that may obstruct/delay the performance of their work.
FCI is the Global Representative Body for Factoring and Financing of Open Account Domestic and International Trade Receivables. FCI was set up in 1968 as a non-profit global association. With today close to 400 member companies in more than 90 countries, FCI offers a unique network for cooperation in cross-border factoring. Member transactions represent nearly 60% of the world’s international correspondent factoring volume.
FCI is a non-exclusive organization, open to any company which is providing Factoring Services or plans to set up Factoring Activities but also to service providers to the industry.
FCI offers three major areas of activities:
- CONNECT: the Business network supports cross-border factoring activities through which its members cooperate as export and import factors
- EDUCATE: FCI promotes and develops best practices in both domestic and international factoring and related Open Account Finance products
- INFLUENCE: FCI promotes and defends the Industry with stakeholders and policy makers worldwide