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Dr. Benedict Oramah,
Afreximbank Executive Vice-President (middle) with other presenters at the
opening of the factoring workshop.
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The workshop participants
in group photograph
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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.
About
Afreximbank:
The African Export
Import Bank was established in October 1993 by African governments, African
private and institutional investors, and non-African investors to finance and
promote intra- and extra-African trade. Its two basic constitutive documents
are the Establishment Agreement, which gives it the status of an international
organization, and the Charter, which governs its corporate structure and
operations. Since 1994, the Bank has approved more than $25 billion in
credit facilities in support of African trade, including $3.71 billion in 2012.
Afreximbank is headquartered in Cairo. For more information, visit: www.afreximbank.com
Signed:
Obi Emekekwue
Afreximbank External Communications
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