The Managing Director, Nigeria Export-Import (NEXIM) Bank, Mr Abba Bello, has charged the National Assembly to expedite action on the passage of the Nigerian Factory Bill in order to improve Nigeria’s share of intra-African trade.
Factoring is a financing method in which a business owner sells accounts receivable at a discount to a third-party funding source to raise capital.
Abba said these during a meeting with the Senate Committee on Banking, Insurance, and other Financial Institutions on the proposed factoring bill.
The meeting, was presided over by the committee Chairman, Senator Uba Sani, and was attended by representatives from the African Export Import Bank, the Central Bank of Nigeria, and other stakeholders in the financial sector.
He told the National Assembly that passing the Nigerian Factory Bill into law will promote Small and Medium-sized Enterprises in the country as well as create thousands of jobs.
Mr. Bello noted that since it was becoming difficult for small businesses to raise funds from banks to finance their operations, there was need to come up with an alternative financial instrument that would facilitate trade.
He expressed optimism that factoring would provide another financing options to mitigate the tradition challenges of SMEs in meeting the eligibility criteria for accessing credit from the traditional banking institutions.
This, he added, would help to stimulate necessary investment interests towards rapid development of factoring in Nigeria.
Sen. Sani, commended the initiative championed by NEXIM Bank, adding that the proposed bill when passes into law would promote the integration of the country into the global factoring market.
He said factoring was an essential component in international trade and played a significant role in the promotion of export and import activities of country.
Sani said, “Factoring is an essential component in international trade and plays a significant role in the promotion of export and import activities of a country by providing the needed platform for businesses to accelerate their cash flow in much quicker manner, particularly in export related activities.