Factoring and Leasing Continue Meteoric Rise in Togo

Banking

Thursday, 13 July 2023 11:04

Factoring and Leasing Continue Meteoric Rise in Togo

(Togo First) - Factoring financing almost tripled in Togo between March 2022 and March 2023, from CFA7 billion to CFA19 billion. The figure was recently reported by Minister of Finance, Sani Yaya, at the National Credit Council.

The official also noted that leasing credits stood at CFA23 billion at the end of March 2023, nearly twice the amount recorded at the end of March 2022.

By comparison, the outstanding amount of factoring financing went from 2 billion in June 2021 to 9 billion at the end of June 2022 (an annual increase of 350%), while leasing activities grew by 16% year-on-year, reaching 14 billion at the end of June 2022.

Factoring, let’s recall, is a financing tool that allows a company to assign its customer receivables to a specialized company (which will recover these receivables) in exchange for liquidity, thus improving its cash flow and financing its activities. Leasing, on the other hand, is used for the acquisition of assets such as equipment, vehicles, or real estate, in the form of "renting". In this mechanism, the tenant pays agreed rents and ultimately becomes the owner of the equipment at the end of the contract. This allows companies to acquire equipment without overly affecting their cash flow.

In Togo, African Lease Togo (ALT) is one of the top actors offering these financing options.

Ayi Renaud Dossavi

REFORMS OVERVIEW

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