This Policy Brief developed by the African Capacity Building Foundation (ACBF) and the African ExportImport Bank (Afreximbank) explores the opportunities offered by factoring which provides a solution to address the financing gap for Small and Medium enterprises (SMEs) to support Africas structural transformation particularly in trade development as part of the African Continental Free trade Agreement (AfCFTA). The aim of the Policy Brief is to examine the capacity imperatives for the development and use of factoring as an innovative trade financing tool to advance the AfCFTA. The Policy Brief notes that Africa performance in the factoring market needs to improve significantly based on a number of key indicators such as share in global factoring, including international factoring, innovation such as reverse factoring, number of factoring companies, turn-over per factoring companies and factoring GDP penetration. The Policy Brief also highlights that Africas factoring volume of about US$27 billion representing a share representing a share of 0.84% in the global factoring market of approximately US$3,300 billion a year in 2019 is extremely low. It therefore argues that Africa needs a coordinated approach to capacity development to successfully develop and use factoring.