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The African Export-Import Bank said it has approved $83 million for African businesses involved in factoring since 2012 in a bid to boost economic growth.

Kanayo Awani, the Managing Director of Afreximbank’s Intra-African Trade Initiative, disclosed this during a workshop in Abidjan last week.

She said $48 million of the amount has already been disbursed while the bank was also processing additional factoring lines totaling $90 million for African factors and factoring companies.

According to Awani, Afreximbank has approved $23 million for factors in Mauritania, $35 million for those in Senegal, $5 million for Mauritius, $10 million for those in South Africa and $10 million for the ones in Zimbabwe. The Cairo-based multilateral institution is also assessing credit lines for institutions in Burkina Faso, Kenya, Egypt, Botswana, Cameroon, Mauritius, Zambia, and Zimbabwe.

In factoring, an exporter or supplier sells his accounts receivable or invoices at a discount to a third party, called a factor, in exchange for immediate cash with which to finance continued business.

Awani, who is also Chairperson of the Africa Chapter of the International Factors Group (now IFG+FCI Union), said that Africa was still not a significant player in the global factoring market and accounted for only 0.7 per cent of the 2.3 trillion euros of world factoring transactions in 2015. South Africa, Tunisia, Morocco, Egypt, and Mauritius accounted for almost all the African transactions, she said.

However, opportunities for factoring in Africa remained broad as the continent’s factoring volumes were estimated to grow from 24 billion euros in 2012 to 90 billion euros in 2017 and 200 billion euros in 2020.

In its effort to promote factoring in Africa, Awani said the Afreximbank is offering lines of credit to factors, providing liquidity and offering payment risk protection. The bank is also raising awareness through educational and training activities and helping to create enabling infrastructure, including the improvement of the legal environment.