Oct 29, 2024

New Platform Aims to Unlock Affordable Capital for Small Businesses, Strengthen Supply Chains, and Create Jobs. Devdiscourse News Desk | Washington DC | Updated: 29-10-2024 14:23 IST | Created: 29-10-2024 14:23 IST The program will debut in Nigeria, where IFC and C2FO estimate that such a platform could unlock $25 billion in annual financing for MSMEs. Image Credit: SHARE To enhance access to affordable finance for micro, small, and medium enterprises (MSMEs) across Africa, the International Finance Corporation (IFC) has announced a strategic partnership with supply chain finance leader C2FO. This new partnership will introduce Africa’s first web-based, multinational working capital platform dedicated to smaller businesses, with an initial focus on Nigeria. MSMEs form the backbone of African economies, representing up to 90% of businesses and 80% of jobs across the continent. However, limited access to affordable working capital often constrains their potential. This new initiative by IFC and C2FO will leverage C2FO's patented technology and dynamic discounting model to bridge this financial gap, providing MSME suppliers with immediate cash for their receivables at discounted rates—without collateral or the traditional barriers to lending. The platform will connect MSMEs with their larger anchor buyers, as well as global and local financial institutions. This structure enables smaller suppliers to receive early payments on invoices, with the buyers’ credit risk effectively shared by financial institutions, easing access to capital. The initiative supports broader goals announced by World Bank President Ajay Banga to improve Africa’s food security and economic resilience through supply chain strengthening. The program will debut in Nigeria, where IFC and C2FO estimate that such a platform could unlock $25 billion in annual financing for MSMEs. According to IFC, every $1 million of working capital made available in developing regions creates an estimated 16 jobs over two years. “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. This partnership is a milestone in global supply chain financing, with IFC and C2FO looking to broaden the initiative across Africa. C2FO’s CEO, Alexander Kemper, emphasized that Nigeria is an ideal launch point due to its large and dynamic small business sector, which will play a key role in scaling the model across the continent. By facilitating direct access to working capital, the platform will empower African MSMEs to grow sustainably, strengthen local supply chains, and foster job creation.