In Togo, factoring and leasing continue their meteoric rise, a few years after their introduction. At the recent meeting of the National Credit Council, Sani Yaya, Togo's Minister of Economy and Finance, highlighted the positive results achieved by these two tools

Factoring financing grew steadily, with assets outstanding reaching 19 billion FCFA at the end of March 2023, nearly triple the 7 billion registered a year earlier (an annual increase of 171%), thus showing the increasing adoption of factoring by companies as a means of financing their activities.

For their part, leasing competitions have also grown significantly, doubling in the space of a year to reach 23 billion CFA francs at the end of the first quarter 2023.

In comparison, the stock of factoring financing rose from 2 billion in June 2021 to 9 billion at the end of June 2022 (an increase of 350% year-on-year), while leasing activities grew by 16% year-on-year, to reach 14 billion at the end of June 2022.

As a reminder, factoring is a financing tool that allows a company to transfer its receivables to a specialized company (which will collect these receivables) in exchange for cash, thus improving its cash flow and financing its activities. Leasing, on the other hand, is used for acquisition of assets such as equipment, vehicles or real estate, in the form of “rental”. In this mechanism, the tenant pays agreed rents and eventually becomes the owner of the equipment at the end of the contract. This allows businesses to acquire equipment without affecting their cash flow too much.