The report highlights receivables finance as a practical and scalable tool for improving liquidity. By enabling businesses to use unpaid customer invoices as financeable assets, receivables finance can help address one of the most persistent challenges facing SMEs: access to timely funding.

While South Africa has a well-established debtor finance market and remains one of the leading factoring markets on the African continent, the report notes that the sector remains underutilised compared with more mature international markets. It identifies a number of structural, legal, regulatory and data-related barriers that continue to limit the market’s full potential.

A key area of focus is the use of anti-cession clauses in commercial contracts. These clauses can restrict suppliers, particularly SMEs, from using their receivables to access finance, even where invoices have been approved and payment is expected. The report argues that clearer legal rules around receivables assignment and cession would help improve certainty for buyers, suppliers and financiers.

The report also highlights the importance of a centralised digital receivables registry. Such a registry could help improve transparency, reduce the risk of double financing, strengthen confidence among lenders and insurers, and support the development of more efficient receivables finance products.

In addition, the report calls for improved reporting and oversight of receivables finance activity. More transparent data would help policymakers, regulators and industry participants better understand the size, structure and economic contribution of the market, while supporting more targeted interventions for SME finance.

The recommendations set out in the report include the development of a dedicated receivables finance legal framework, a centralised registry, stronger market conduct guidance, improved reporting standards, and greater collaboration across banks, fintechs, corporates, regulators and industry associations.

The report also places South Africa’s opportunity within a wider regional context. As the African Continental Free Trade Area continues to develop, modern receivables finance frameworks could play an important role in supporting open account trade, cross-border transactions and SME participation in regional value chains.

This work also complements wider initiatives across the continent, including FCI’s ongoing collaboration with partners such as Afreximbank to support the development of factoring, receivables finance and enabling legal frameworks in African markets.

FCI welcomes the publication of this important report and the continued work being undertaken in South Africa to support the growth of receivables finance. The themes raised align closely with FCI’s broader mission to promote factoring, receivables finance and open account trade finance as effective tools for financial inclusion, SME growth and trade development.

Read the full BASA report, Building a modern receivables finance ecosystem in South Africa, to explore the recommendations and opportunities for strengthening receivables finance in South Africa.

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