The African Export-Import Bank (Afreximbank) is training financial institutions in Uganda to expand factoring services, seeking to improve access to working capital for businesses, particularly small and medium-sized enterprises, and support cross-border trade.
The three-day workshop focused on helping lenders develop receivables-financing products, manage credit risks and prepare pilot programmes for the Ugandan and wider African markets, according to Afreximbank.
Factoring allows businesses to obtain financing against unpaid invoices, helping them access cash before customers settle their bills. Wider adoption could give businesses an alternative source of working capital, particularly those that struggle to secure conventional bank loans.
The workshop followed a regional conference on factoring, receivables finance and credit insurance held in Kampala in April. Afreximbank said the latest programme was designed to translate the interest generated by that conference into practical lending capabilities, product development and implementation plans.
“Building sustainable factoring markets requires more than awareness,” Farida Kasujja, Afreximbank’s senior specialist for client relations in East Africa, said in opening remarks. “It calls for capable institutions, practical implementation plans and solutions that respond to the working-capital needs of African businesses.”
The training covered the identification of attractive value chains, product structuring, operating models, risk management, credit insurance and the preparation of pilot schemes.
Afreximbank’s strategy also includes financing, legal and regulatory development, capacity building and partnerships intended to establish a broader factoring market across Africa. Lina Iyok, the bank’s senior manager for trade finance and correspondent banking, outlined those initiatives during the workshop.
The programme was organised with FCI, a global network focused on factoring and open-account domestic and international trade receivables. Marius Savin, an FCI consultant and adviser, and Tinashe Tamba, FCI’s Africa regional manager seconded to Afreximbank, co-facilitated the sessions.
Afreximbank said it hopes the training will help build a network of financial institutions capable of offering commercially viable factoring services and enable more African businesses to participate in domestic, regional and international trade.
The impact of the initiative will depend on whether participating lenders translate the training into active products, extend financing to businesses and manage the risks associated with unpaid invoices. Afreximbank said the broader objective is to strengthen financial institutions’ capacity to deliver receivables-financing solutions, particularly for small and medium-sized enterprises.
