Monday, 25 November 2013
African businesses should be equipped to compete in new environment, says Afreximbank at factoring workshop
Dr. Benedict Oramah, Afreximbank Executive Vice-President (middle) with other presenters at the opening of the factoring workshop.
Douala (Cameroon), 24 Nov. 2013 –African businesses must equip themselves in order to compete effectively in the new environment resulting from the adoption of open account systems in many markets across the world, Dr. Benedict Oramah, Executive Vice-President of the African Export-Import Bank (Afreximbank) in charge of Business Development and Corporate Banking, has said.
Since open account terms had become standard practice in many markets, concerted effort was needed to equip African businesses to compete under such an environment, said Dr. Oramah in an address at a one-day workshop on “Factoring as an Alternative Trade Finance Instrument in a Competitive World,” organized by Afreximbank in Douala, Cameroon, on 22 November.
“As the use of letters of credit as a trade payment assurance instrument dwindles and as trade with new markets blossom, African businesses have to find ways of adapting to the new challenges and opportunities,” he said. Factoring offered the required solution because it provided businesses with access to credit without the requirement for collaterals or other security other than the receivables that were generated in the normal course of business.
According to Dr. Oramah, factoring is a very important tool for promoting non-commodity exports in a highly competitive world and has the capacity to place African businesses at near equal footing with others in global markets.
Driving home the importance of promoting factoring in Africa, Dr. Oramah said that in 2012, factors advanced 300 billion Euros to some 500,000 clients, but Africa accounted for only 1.2 per cent of world factoring transactions.
The workshop featured presentations on various aspects of factoring by Peter Brinsely, Director of PoinForward Consulting and Chairman of the Education Committee of the International Factors Group. Mr. O.S. Vinod, Director of Blend Financial Services Ltd., discussed the successful establishment of a factoring business by Jamii Bora Bank in Kenya while Frederic Mao of Afreximbank outlined the Bank’s support for the development of factoring in Africa.
About 50 participants, representing businesses engaged in factoring activities across Africa, took part in the workshop.