Afreximbank has partnered with tech-based working capital solutions provider Demica to roll out a new supply chain finance (SCF) platform across Africa. The collaboration will see Demica license its technology platform to Afreximbank on a white-label basis. The solution will focus on approved payables financing, with coverage extended across Afreximbank’s member countries. Partnership marks Demica’s first in the pan-African market. The fintech firm, which currently has over US$18.4bn of funded assets outstanding on its platform, currently provides the technology for supply chain finance programmes run by financial institutions including ING, Lloyds and BBVA.
Africa’s current share of global supply chain finance (SCF) transactions is approximately 1%. Favorable Outlook for the business as a result of ongoing economic development and the implementation of the African Continental Free Trade Area (AfCFTA), which will increase the need for cross-border supply chain financing. To drive greater take-up of SCF in the continent, the bank recently partnered with global factoring association FCI. Using a grant from the African Development Bank (AfDB), the two sides will work to raise awareness of the product through advisory and mentoring services to entrepreneurs, financiers and commercial banks. Demica’s technology also underpins FCI’s FCIreverse payables finance platform. It says that the common technology will facilitate collaboration between Afreximbank, Demica, and FCI in promoting open account payables and receivables financing in Africa.