Senate Approves Receivables‑Financing Bill to Unlock $50 Billion African Factoring Market for MSMEs

• Abiru: Nigeria’s share of continental market is under 1%

The Senate yesterday approved the Factoring Assignment and Receivables Financing Bill, 2026, opening a pathway for Nigerian micro, small and medium enterprises to access a continental debt‑factoring market worth more than $50 billion, from which the country currently captures less than one per cent.

The upper chamber agreed with the House of Representatives on the proposed legislation, which establishes a legal and regulatory framework for debt factoring. This financing mechanism allows businesses to convert unpaid invoices and credit sales into immediate working capital without relying on conventional bank loans.

Senate Leader Opeyemi Bamidele led the debate, stating that the legislation would create an enabling environment for alternative financing and strengthen liquidity for businesses across the country.

“The Factoring Assignment and Receivable Financing Bill 2026 seeks to create a regulatory framework that would facilitate the development of debt factoring as an alternative means of financing for domestic and international trade in Nigeria and provide an enabling environment for it to thrive,” Bamidele explained.

He added that the bill defines the framework governing factoring contracts between sellers and financiers, clearly setting out the rights and obligations of all parties involved.

The commercial significance of the proposed legislation was highlighted by Senator Adetokunbo Abiru (Lagos East), Chairman of the Senate Committee on Banking, Insurance and Other Financial Institutions, who described the bill as a critical lifeline for small businesses struggling with liquidity constraints.

Abiru told the chamber that African factoring, driven largely by the African Export‑Import Bank (Afreximbank), has grown into a market exceeding $50 billion, yet Nigeria, Africa’s largest economy, remains a marginal player.

He said, “The size of that market today is in excess of $50 billion, and Nigeria’s share is under one per cent.”

He noted that Egypt and Morocco have already benefited substantially from factoring frameworks similar to those proposed in the bill.

“Passing this legislation will support our MSMEs in converting credit sales into cash without resorting to conventional borrowing arrangements,” Abiru added.

In practice, the law would allow businesses holding unpaid invoices to sell those receivables to a factoring company in exchange for immediate cash, easing the cash‑flow pressures that have long hindered growth among small enterprises.

The bill also modernises the legal architecture governing commercial transactions and is expected to enhance Nigeria’s competitiveness in regional and global trade.

After unanimous support from lawmakers, the bill was examined clause by clause in the Committee of the Whole before being passed and forwarded for presidential assent.