Middle East and Africa Factoring Services Market Outlook, 2030

The factoring market in the Middle East & Africa is expanding, led by fintech and banking reforms in Saudi Arabia, UAE, and South Africa. In Saudi Arabia, businesses are subject to ZATCA’s Phase 2 e‑invoicing mandate, effective from January 2023 requiring real-time invoice validation via Fatoora with QR codes, IRNs, and cryptographic signatures, progressively covering firms down to SAR 1 million in turnover by late 2025. This infrastructure supports receivables finance by ensuring invoice authenticity and regulatory compliance.

UAE formalized its factoring framework through Federal Decree-Law No. 20 of 2016, effective December 2021, clarifying that present and future receivables may be assigned and registered via the national Movables Security Register. Firms in DIFC and ADGM are now offering digital supply‑chain finance and invoice discounting under regulated clearance from DFSA/SCA. In South Africa, structured factoring services are provided by major financial institutions such as Merchant Factors, Absa, Nedbank, and others, especially serving logistics, manufacturing, transport, and healthcare sectors. South Africa’s financial sector manages assets exceeding US $1.4 trillion, with factoring turnover exceeding ZAR 25 billion annually at the latest estimate. Across the region, factoring is available through both recourse and non‑recourse models, with credit risk often borne by the client unless structured with collision insurance. Digital portals and fintech platforms integrate invoice upload, debtor scoring, and funding dashboards especially within DIFC, ADGM, and South Africa’s digital finance ecosystem. In May 2024, Alraedah Digital Solutions partnered with Menap-based fintech ABHI to provide invoice factoring and earned wage access solutions, targeting SMEs in logistics, healthcare, and construction. These moves align with government efforts to diversify the economy and boost working capital for non-oil businesses. Trade corridors linking the Gulf to Africa and Asia also drive steady factoring usage, while regulatory reforms in KSA and UAE increasingly support factoring as a mainstream financing option for SMEs and mid-market companies.

According to the research report "Middle East and Africa Factoring Service Market Overview, 2030,", the Middle East and Africa Factoring Service market is anticipated to grow at more than 7.45% CAGR from 2025 to 2030. In July 2024, MNT‑Halan, a leading Egyptian fintech platform, acquired Tam Finans, a Turkish micro‑leasing firm, to deepen its factoring services in Egypt and expand consumer credit in Turkey the transaction exemplifies rising cross-country fintech integration in the region’s financial ecosystem.

In Saudi Arabia, the e‑invoicing law (Fatoora) under ZATCA has enabled SMEs to generate verified invoices with digital signatures and QR codes, supporting reduced credit risk and lowering factoring underwriting time by up to 40% in some use cases. The gradual implementation from large taxpayers in 2021 to turnover thresholds of SAR 1 million by end‑2025 has set up a robust digital trail for invoice-based finance. Fintech-backed platforms and banks now offer same‑day disbursement in under 48 hours via digital portals linked to accounting systems. In 2025, Commercial Bank of Dubai integrated J.P. Morgan’s Liink blockchain network, enabling secure and real-time international invoice verification essential for cross-border factoring. Legal foundations such as ZATCA’s e‑invoice validation in Saudi Arabia, UAE’s Movables Security Register, and South Africa’s factoring through regulated financial institutions enable enforceable receivables financing. Many providers include credit vetting, debtor collections, and ledger monitoring dashboards for client visibility. Major global actors like Bibby Financial Services launched digital platforms in Africa for real-time factoring, while Euler Hermes rolled out credit insurance backed services for exporters in key African economies including South Africa and Nigeria. Pan‑Africa workshopssuch as FCI’s 2025 training in Abuja help regulators and providers build capacity for supply chain finance solutions.

Market Drivers

• Government-Led SME Financing Reforms: In Saudi Arabia, the Saudi Central Bank (SAMA) introduced the “Small and Medium Enterprises Bank” in 2021 to fund underserved SMEs, encouraging the use of invoice factoring as a working capital tool. Similarly, the UAE launched a unified digital invoice registry under the Central Bank to support factoring services across sectors like trade, logistics, and healthcare. These state-led reforms are helping normalize factoring as a formal financing option.
• Infrastructure and Construction Boom: Large-scale infrastructure projects such as Egypt’s New Administrative Capital, Saudi Arabia’s NEOM, and the UAE’s Expo-linked developments are fueling demand for supply chain financing. Contractors and subcontractors use factoring to maintain liquidity and manage extended payment terms. Factoring firms target these long-term projects to offer invoice-based finance to engineering, procurement, and construction vendors.

Market Challenges

• Low Awareness and Informal Trade Culture: In many African economies like Nigeria, Kenya, and Ethiopia, businesses rely on informal credit and personal relationships for trade finance. The concept of receivables factoring remains unfamiliar outside urban centers. This limits the market reach of factoring companies, especially among rural and informal SMEs.
• Underdeveloped Credit Information Systems: Many countries in Sub-Saharan Africa lack strong credit bureaus or reliable invoice verification systems. Factoring providers struggle to assess the creditworthiness of debtors, increasing risk of default and fraud. This affects uptake of factoring among cautious financial institutions in these regions.

Market Trends

• Islamic Factoring Gaining Ground: In countries with strong Shariah finance demand like Saudi Arabia and the UAE, firms are offering non-interest-based factoring products. Islamic factoring structures such as “Murabaha-based receivables financing” are gaining traction, especially among halal-certified supply chains in food, textiles, and logistics. This diversification of factoring products aligns with religious compliance needs.
• Pan-African Digital Factoring Startups Emerging: Companies like Numida in Uganda and Lulalend in South Africa are building mobile-based factoring and invoice financing platforms. These platforms cater to unbanked and semi-formal micro-businesses that operate through mobile money. In Kenya, fintech lenders like Pezesha use AI to assess invoice authenticity and offer quick receivables-based loans to merchants on e-commerce platforms like Jumia and Copia.

The primary reason is the region’s push for non-oil trade diversification and rising export-import activity across Africa and the Gulf Cooperation Council (GCC).

Several African nations and Gulf economies actively pursue global trade agreements to reduce dependency on traditional revenue sources, and that shift fuels a higher demand for international factoring. Countries like the UAE, Saudi Arabia, Kenya, and Egypt have improved port infrastructure and expanded free trade zones, which support cross-border trade. Exporters in Africa increasingly use international factoring to mitigate currency risks, manage long payment cycles from European and Asian buyers, and navigate the complex shipping credit terms. African SMEs dealing with European buyers often lack the collateral or credit history to secure bank loans, and factoring gives them access to quick working capital without creating debt.

In the UAE, the Ministry of Economy is working to increase non-oil exports under the ‘Operation 300bn’ plan, and that strategic move encourages exporters to adopt receivables financing methods like international factoring. Banks in the region are partnering with global factoring networks such as FCI (Factors Chain International) to provide cross-border receivable services with credit risk insurance. Nigeria and South Africa have seen growth in oil derivatives, metals, agriculture, and textile exports to Asia, which leads firms to adopt factoring as a reliable solution to reduce international default risks. Islamic financing instruments such as Murabaha and Ijara are also being customized for international factoring to suit Shariah compliance needs. With rising global trade, firms want faster liquidity release while reducing bad debts and admin costs, and this makes international factoring a preferred tool. Exporters prefer factoring to traditional letters of credit due to reduced paperwork, faster approval, and limited involvement of foreign banks. The international segment benefits from trade promotion policies and liberalized customs clearances in Dubai, Jeddah, and Lagos, which strengthen its market position across MEA.

The main reason is the strong preference among banks and private lenders for low-risk, borrower-accountability models in a volatile credit environment.