The African Export-Import Bank (Afreximbank) has partnered with Sterling Bank to introduce the ‘Payables Finance’ supply chain finance product to the Nigerian market, in a bid to enhance trade finance solutions in Nigeria.
Branded as ‘Afreximbank Tradelink,’ this innovative offering is part of Afreximbank’s digital suite under the Africa Trade Gateway (ATG) initiative, which aims to equip African corporates and commercial banks with digital tools to streamline trade processes.
Payables Finance provides suppliers with access to financing by allowing them to receive early payments for approved invoices from corporate buyers. This arrangement enables suppliers to manage their working capital effectively, facilitating business growth. Importantly, the financing cost is determined by the credit rating of the corporate buyers, making it particularly beneficial for small and medium-sized enterprise (SME) suppliers facing challenges in accessing affordable bank finance.
Recognised as one of the fastest-growing trade finance products globally, Payables Finance presents African businesses an opportunity for growth. The partnership between Afreximbank and Sterling Bank harnesses the strengths of both institutions to deliver a comprehensive solution tailored to Nigerian corporates and their suppliers.
Executive Vice President of Afreximbank Global Trade Bank, Haytham ElMaayergi, expressed enthusiasm for the launch, highlighting its significance in advancing the bank’s vision of transforming Africa’s trade landscape. ElMaayergi stated, “Afreximbank identified supply chain finance as a solution for improving access to trade finance in Africa, and embarked on a journey to increase penetration through financial intervention and capacity building.”
The Director and Global Head Trade Finance at Afreximbank, Gwen Mwaba, stressed the broader objective of reducing the trade finance gap in Africa, particularly for SMEs. Mwaba stated, “the product, which will deploy world-class technology and a collaborative delivery model, will contribute towards achievement of the Bank’s strategic objective of reducing the trade finance gap in Africa, particularly for the Small and Medium Enterprises (SMEs) segment.”
Ecosystem Banking Head at Sterling Bank, Chukwuka Onuaguluchi, also highlighted the institution’s commitment to meeting the trade finance needs of Nigerian corporates and their suppliers. Onuaguluchi remarked, “Sterling Bank is committed to meeting the trade finance needs of Nigerian corporates and their suppliers and we are proud to introduce this much-needed product in partnership with Afreximbank for the benefit of Nigerian businesses.”
Afreximbank plans to roll out Payables Finance across Africa in partnership with leading financial institutions, with Nigeria serving as the initial launch market. This expansion aims to bolster local currency financing capabilities across the continent. Additionally, capacity-building initiatives will be conducted to raise awareness of supply chain finance and its benefits.
The introduction of these financial products is supported by a state-of-the-art supply chain finance platform developed by UK-based fintech, Demica. This platform, renowned for its efficiency in working capital solutions, will facilitate the seamless delivery of Payables Finance to businesses across Africa.
Source: APO Group
By Derrick Kafui Deti – Digital Economy Magazine
