African Export-Import Bank (Afreximbank) has signed a landmark agreement with Banque Postale du Congo (BPC) to provide the Congolese bank with an EUR 10-million factoring facility to support SMEs in the Republic of Congo and the CEMAC region.
Signed on behalf of the two institutions by Kanayo Awani, Executive Vice President, Intra-African Trade Bank, Afreximbank, and Calixte Tabangoli, Chief Executive Officer, BPC, during a ceremony in Cairo, the facility will enable BPC to expand its factoring activities by engaging in domestic and cross-border factoring.
The facility builds on a strong partnership that has existed between Afreximbank and BPC for more than five years which has seen them collaborating in a series of initiatives aimed at supporting factoring. These have included facilitating the adoption of a factoring law in the Republic of Congo with the objective of creating an enabling legal and regulatory environment for the growth of factoring as an alternative method of financing for SMEs.
Afreximbank recognises factoring as an important tool for expanding and facilitating African trade, particularly for SMEs. As a member of the Africa Chapter of the FCI, the largest representative body for the factoring industry, Afreximbank has been working with local banks in its member states to seize the opportunities found within the factoring industry while educating and providing support to ensure that world class standards are established and replicated in Africa’s factoring industry, especially as trade under the African Continental Free Trade Area agreement is taking shape.
Mr. Calixte Tabangoli, Chief Executive Officer, Banque Postale du Congo commented: “A few years ago, no one could have imagined that we could accomplish what we did today – becoming the leading factoring business in the Republic of Congo. We do not take this position for granted. As I always say, becoming the number one is difficult, but maintaining the number one position is more difficult. That is the reason why our strategic development plan 2023-2025 has concrete steps for BPC towards becoming the first Congolese Banking Group, with a factoring subsidiary. We are ready to take factoring to a fundamentally new direction. That said, we will need more support from the Bank, and do not be surprised to see us again”.
Mrs. Kanayo Awani, Executive Vice President, Intra-African Trade Bank, commented: “The significance of this transaction is not lost on us at Afreximbank, given the strong partnership we have developed with Banque Postale over the years in support of factoring. This partnership has yielded positive results, including the adoption of the Afreximbank Factoring Model Law by the Republic of Congo in 2021 and the sensitisation and awareness campaigns conducted by our two institutions which have helped bring factoring to the fore as a major alternative to trade finance in the Republic of Congo. We are confident that this support will enable Banque Postale to capitalise and strengthen its factoring business and allow it to provide adequate support to those SMEs in Congo that have limited access to bank financing. In line with our strategic plan, Afreximbank remains fully committed to supporting Banque Postale as it advances its mission to promote factoring in Congo and the Central Africa Region.”