Afreximbank and Fiducia Partner on Supply Chain Finance in Africa

Afreximbank and Fiducia have partnered to address the “supply chain finance gap” in Africa.

The bank and the supply chain financing firm have formed a strategic partnership in which Afreximbank will provide additional liquidity for factoring on the Fiducia marketplace, the companies said in a Thursday (July 6) press release.

“This will further lower funding costs on the platform and ensure strengthening and development of suppliers and buyers alike, by promoting availability of capital to facilitate trade,” Fiducia CEO Imohimi Aig-Imoukhuede said in the release. “Similarly, the two partnering entities will work together to apply similar marketplace benefits to [micro and small- to medium-sized businesses (SMBs)] across the African continent.”

These benefits will help reduce the supply chain finance gap that has a particularly strong impact on SMBs, according to the release. The partnership will promote on-lending to the banks and nonbanks that use the Fiducia marketplace, the release said.

“[SMBs] contribute the majority of economic output and employment generation in Africa,” Kanayo Awani, executive vice president of Intra-African Trade Bank at Afreximbank, said in the release. “Greater access to bank financing will, therefore, enhance the growth of this vital segment.”

The partnership joins several other efforts to boost the availability of trade finance in Africa.

For example, the African Development Bank Group said in December that it was supporting the trade finance efforts of Bank One Limited, providing a $40 million trade finance package that was meant to help Bank One of Mauritius increase its capacity to provide trade finance to SMBs, local corporates and other key sectors in Mauritius and across the continent.

In October, Nigerian startup Breeze partnered with United Kingdom-based supply chain finance company Finverity to accelerate its mission of providing SMBs in Africa with access to trade finance.

Breeze aims to distribute capital to SMBs in Africa, solving the continent’s “$120 billion annual trade finance deficit” that exists because most of African banks’ trade financing goes to larger corporations, even though many trade participants in the region are SMBs.

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