Nigeria’s Senate has passed the Factoring Assignment and Receivables Financing Bill, 2026, paving the way for micro, small and medium enterprises to access a global debt factoring market valued at over $50 billion, a space where the country currently accounts for less than one per cent of activity.
The legislation, approved following concurrence with the House of Representatives, establishes a formal legal and regulatory structure for factoring transactions, enabling businesses to convert unpaid invoices and credit sales into immediate liquidity without relying on traditional bank loans.
According to Brandspur Banking News Desk, the bill is positioned as a major financial reform aimed at expanding alternative funding channels for businesses struggling with cash flow constraints, particularly within Nigeria’s MSME sector.
During plenary, Senate Leader Opeyemi Bamidele explained that the framework is designed to support domestic and international trade by standardising factoring contracts and clearly defining the rights and obligations of all parties involved in receivables financing arrangements.
Further legislative backing came from Adetokunbo Abiru, who noted that Africa’s factoring market—driven largely by institutions such as the African Export-Import Bank—has expanded beyond $50 billion, while Nigeria continues to lag behind despite being the continent’s largest economy. He stressed that structured receivables financing would significantly improve liquidity access for small businesses.
Under the new framework, companies will be able to sell outstanding invoices to financing institutions in exchange for immediate cash, reducing dependence on conventional credit systems and improving working capital circulation across supply chains.
Lawmakers further highlighted that the reform aligns Nigeria’s commercial law with modern trade finance practices, enhancing the country’s competitiveness in regional and global markets while improving financing access for businesses across sectors.
The bill has now been transmitted for presidential assent, marking a key step toward opening up a broader financing ecosystem that could reshape liquidity access for MSMEs and strengthen Nigeria’s participation in the global factoring market.
