‘Quick Passage of Factoring Bill Crucial’

The quick passage of the bill on factoring in Nigeria has been described as a crucial step in facilitating the ease of doing business and procuring the trust of investors in the country.

Speaking during the public hearing on the Factoring Bill, the Chairman of the House of Representatives Banking and Currency Committee, Jones Onyereri, said the introduction of factoring in the financial sector would serve as complementary financing to conventional financing and would largely target micro, small and medium enterprises ( MSMEs).

“This will facilitate the provision of cash flows to MSMES, especially those that have quality receivables and may not be in the position to obtain adequate conventional bank finance due to high interest rate, collateral or credit profile constraints,” Onyereri was quoted to have said in a statement.

Also, the Managing Director of the Intra-African Trade Initiative at the African ExportImport Bank (Afreximbank), Kanayo Awani, highlighted the importance of factoring in unlocking the economic potential of SMEs, noting that it could play a key role by supporting the SMEs, promoting open accounts, which is beneficial to SMEs in enhancing their competitiveness, and providing an alternative source of trade access to finance

She said Afreximbank was committed to supporting the appropriate legal and regulatory environment as a key strategic initiative for the promotion and development of factoring, noting that, under its strategy, the Bank was required to work on improving the legal environment in order to bring about harmonised standards and transparency within the factoring industry in Africa, and providing for legal en- forcement arrangements.

The public hearing, which was organised in collaboration with Afreximbank, also attracted the participation of representatives of the House of Representatives Banking and Currency Committee, NEXIM, FCI, the Central Bank of Nigeria, the Debt Management Office, the Nigeria Deposit Insurance Corporation, the Financial System Strategy 2020, and several other stakeholders.