IFC and C2FO Launch Supply Chain Financing Platform to Support African MSMEs

Washington, D.C., October 28, 2024 – The International Finance Corporation (IFC), part of the World Bank Group, has announced a strategic partnership with C2FO, a global supply chain finance platform, to develop a web-based working capital solution tailored for micro, small, and medium-sized enterprises (MSMEs) across Africa. This initiative marks IFC’s first dedicated supply chain financing program for smaller businesses in the region, aiming to address critical funding gaps that hinder MSME growth.

MSMEs, which comprise up to 90% of businesses and 80% of jobs in Africa, often face significant challenges in accessing traditional financing options, limiting their growth potential. The partnership between IFC and C2FO is designed to bolster access to affordable working capital, enabling MSMEs to stabilize and grow their operations. This increased liquidity is particularly important in bolstering sustainable economic growth and supporting food security across Africa, a strategic priority recently emphasized by World Bank President Ajay Banga.

Leveraging C2FO’s patented technology and dynamic discounting model, the platform will connect African MSME suppliers and their anchor buyers with both local and global financial institutions. Through discounted invoices approved by buyers, these financial institutions can offer affordable receivables financing to suppliers. This model allows MSMEs to convert their sales receivables into immediate cash, leveraging the better credit standing of their buyers and bypassing the collateral requirements typical 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 project will initially be launched in Nigeria, where the demand for working capital among small businesses is particularly acute. C2FO estimates that a nationwide supply chain finance platform could release around $25 billion in annual financing for Nigerian MSMEs, potentially creating jobs and spurring economic growth. The IFC projects that for every $1 million of working capital made available in developing countries, 16 new jobs are generated 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,” stated Alexander “Sandy” Kemper, CEO of C2FO. “We believe this innovative approach will provide much-needed liquidity to MSMEs, helping them to grow and succeed. It’s only natural that this work begins in Africa’s most populated country, Nigeria, which has an especially promising small business sector.”

This partnership underscores the growing recognition of supply chain finance as a means of closing financing gaps for small enterprises in emerging markets. By improving access to working capital, the IFC and C2FO aim to catalyze local supply chains and drive broader economic development across the continent.