Stakeholders in the Nigerian financial sector have agreed that the quick passage of a law on factoring is a crucial step in facilitating the ease of doing business and procuring the trust of investors in the country.
The Chairman of the House of Representatives Banking and Currency Committee, Jones Onyereri, during a public hearing on the Factoring Bill held at the National Assembly in Abuja said that the introduction of factoring in the financial sector would serve as complementary financing to conventional financing.
According to him, this would mainly target micro, small and medium enterprises (MSMEs) in the country.
“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,” Mr. Onyereri explained.
Kanayo Awani, Managing Director of the Intra-African Trade Initiative at the African Export-Import Bank (Afreximbank), highlighted the importance of factoring in unlocking the economic potential of Small Medium Enterprises, SMEs, noting that it could play a key role by supporting the SMEs.
She said that Afreximbank was committed to supporting the appropriate legal and regulatory environment as a key strategic initiative for the promotion and development of the factoring industry in Africa.