IFC, C2FO Plan to Enhance Financing for Local Enterprises in Africa Begins in Nigeria

To increase the availability of affordable finance and strengthen local enterprises and supply chains across Africa, IFC, a member of the World Bank Group, announced a strategic partnership with leading global supply chain finance platform, C2FO.

The partnership will see IFC and C2FO jointly develop, test, and deploy a specialized, web-based multinational working capital platform for micro, small, and medium enterprises (MSMEs) across Africa. This is IFC’s first dedicated supply chain financing facility in Africa for smaller businesses.

MSMEs account for up to 90 percent of businesses and 80 percent of jobs across the continent, yet these enterprises struggle to obtain working capital through the traditional financial system, constraining the growth of firms. Such financing is critical for helping build more sustainable economic ecosystems, and for strengthening food security, a strategic priority announced by World Bank President Ajay Banga last week.

The program will utilize C2FO’s patented technology and dynamic discounting model to connect MSME suppliers and their anchor buyers with global and local financial institutions. Those institutions will use the platform to extend affordable receivables financing to suppliers through the funding of discounted invoices accepted for payment by buyers.

In turn, African MSME suppliers will be able to improve their access to working capital by converting sales receivables into immediate cash, leveraging the better credit risk of buyers without requiring collateral or facing other barriers of traditional lending.

“IFC is committed to addressing the financing challenges faced by SMEs in Africa. By partnering with C2FO, we aim to unlock significant funding opportunities for these enterprises, enabling them to thrive and contribute to economic growth,” said Makhtar Diop, IFC Managing Director.

The program will begin in Nigeria, where C2FO estimates that a national supply chain finance platform could unlock around US$25 billion in annual financing for MSMEs. IFC has estimated that for every US$1 million of working capital made available in developing countries,16 new jobs are created over two years.

“C2FO is honored and delighted to collaborate with IFC to broaden the global impact of our working capital finance model throughout Africa. We believe this innovative approach will provide much-needed liquidity to MSMEs, helping them to grow and succeed,” said Alexander “Sandy” Kemper, C2FO founder and CEO. “It’s only natural that this work begins in Africa’s most populated country, Nigeria, which has an especially promising small business sector.”