The quick passage of a bill on factoring in Nigeria, is a crucial step in facilitating the ease of doing business, and procuring the trust of investors in the country, was underscored recently during a public hearing held at the National Assembly in Abuja.
Speaking during the Public Hearing on the Factoring Bill, the Chairman, 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 will 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 said.
The Managing Director, Intra-African Trade Initiative, African Export-Import Bank (Afreximbank), Kanayo Awani, highlighted the importance of factoring in unlocking the economic potential of SMEs.
He noted that it could play a key role by supporting the SMEs; promote open accounts, which is beneficial to SMEs in enhancing their competitiveness, and provide an alternative source of trade access to finance.
She said Afreximbank is committed to supporting the appropriate legal and regulatory environment as a key strategic initiative for the promotion and development of factoring.
She also noted that under its strategy, the Bank is required to work on improving the legal environment to bring about harmonised standards and transparency within the factoring industry in Africa, and providing for legal enforcement 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 many other stakeholders.