The African Development Bank (ADB) and Afreximbank have signed a grant agreement of US$950,000 to support the development of factoring (a form of debtor finance in which a business sells its accounts receivable (invoices) to a third party (called a factor) at a discount) on the continent.
The Fund for African Private Sector Assistance (FAPA) hosted by the African Development Bank will invest US$500,000 which is intended to finance the capacity building of a number of identified emerging factoring firms, advisory support among established factoring firms and development of a sustainable knowledge and learning platform to support factoring on the African continent. Afreximbank will contribute US$450,000 towards the technical assistance project.
Senior Director in charge of the Nigerian Country Department, Ebrima FAAL said, “Given the multisectoral impact of factoring in supporting businesses within agriculture, manufacturing, telecoms, power generation, partnering with AfreximBank is consistent with our strategic focus as represented under the High 5s namely: Integrate Africa, Feed Africa, Light Up Africa, Industrialize Africa and Improve the standard of living of the people of Africa.”
The Fund for African Private Sector Assistance (FAPA) is a multi-donor trust fund that provides grants for technical assistance activities to public and private sector entities domiciled in Africa. FAPA resources are utilized to promote innovative programs that specifically support the development of SMEs in Africa. FAPA is one of the components of the Enhanced Private Sector Assistance (EPSA) initiative hosted at the African Development Bank.