The national assembly has passed the Factoring, Assignments and Receivables Financing Bill, 2026, a legislation aimed at enabling businesses to convert unpaid invoices and credit sales into immediate cash without relying on conventional bank loans.
The senate concurred with the house of representatives on the bill during plenary on Wednesday.
The proposed law seeks to establish a legal and regulatory framework for debt factoring and receivables financing to improve access to credit, strengthen liquidity, and boost domestic and international trade.
Leading the debate, Opeyemi Bamidele, senate leader and senator representing Ekiti central, said the bill would create an enabling environment for alternative financing and support business growth.
“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,” he said.
Bamidele said the legislation defines the framework governing factoring contracts between sellers and financiers, while setting out the rights and obligations of all parties involved.
He added that the bill had already passed all legislative stages in the house of representatives and was cleared for concurrence by the senate ad hoc committee on compliance, chaired by Abdul Ningi.
“The committee confirmed that all procedural requirements for consideration and concurrence by the senate have been fully met,” he said.
Adetokunbo Abiru, chairman of the senate committee on banking, insurance and other financial institutions, said the legislation would provide an important financing alternative for micro, small and medium enterprises (MSMEs).
Abiru said the African factoring market, driven largely by initiatives of the African Export-Import Bank (Afreximbank), is valued at more than $50 billion, while Nigeria accounts for less than 1 percent of the market.
“The size of that market today is in excess of $50 billion, and Nigeria’s share is under one percent,” he said.
“And I think that putting a regulatory framework behind this will help us position the country properly.”
He said countries such as Egypt and Morocco have already benefited significantly from similar financing frameworks.
“Passing this legislation will support our MSMEs in converting credit sales into cash without going through the normal borrowing arrangements,” Abiru added.
Ningi also assured lawmakers that the compliance committee had reviewed the bill and found no legal impediments to its passage.
Following unanimous support from senators, the bill was considered clause-by-clause in the committee of the whole and subsequently passed.
The legislation will be transmitted to President Bola Tinubu for assent.
