The Senate on Wednesday approved the Factoring Assignment and Receivables Financing Bill, 2026, concurring with the House of Representatives on legislation designed to improve access to funding for Micro, Small and Medium Enterprises (MSMEs).
The bill seeks to establish a legal and regulatory framework for debt factoring, a financing arrangement that allows businesses to convert unpaid invoices and credit sales into immediate cash.
Leading debate on the bill, Senate Leader Senator Opeyemi Bamidele said the legislation would promote alternative financing options and strengthen liquidity for businesses involved in domestic and international trade.
According to him, the bill outlines the framework governing factoring contracts between sellers and financiers, while defining the rights and obligations of all parties involved.
“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,” Bamidele said.
Chairman of the Senate Committee on Banking, Insurance and Other Financial Institutions, Senator Adetokunbo Abiru, described the measure as a significant intervention for small businesses facing liquidity challenges.
Abiru explained that the proposed law would allow MSMEs to convert credit sales into working capital without relying on traditional bank loans.
He noted that factoring has become a major financing tool across Africa, particularly through the African Export-Import Bank (Afreximbank), adding that the African factoring market is valued at more than $50 billion, while Nigeria accounts for less than one per cent of the market.
According to him, countries such as Egypt and Morocco have benefited significantly from the financing model, and the legislation could help Nigerian businesses improve cash flow and expand operations.
Following unanimous support from lawmakers, the Senate considered the bill clause-by-clause at the Committee of the Whole before passing it. The legislation is expected to boost access to finance, modernise commercial transactions, and strengthen Nigeria’s competitiveness in regional and global trade.
