Senate passes bill to unlock funding for small businesses

Nigeria's Senate has passed a landmark bill designed to unlock crucial funding for small and medium-sized enterprises (SMEs) and stimulate trade.

The Factoring, Assignments and Receivables Financing Bill, 2026, aims to create a comprehensive legal framework for receivables financing. This financial mechanism allows businesses to sell their unpaid invoices to financiers at a discount, converting accounts receivable into immediate cash. The bill successfully passed its third reading during a plenary session after being considered and adopted in the Committee of the Whole.

Senate Leader Senator Opeyemi Bamidele moved the motion for the bill's third reading, highlighting its importance for businesses and the broader economy. Minority Leader Senator Abba Moro seconded the motion, emphasizing the expected benefits. Following a voice vote, Senate President Godswill Akpabio announced the bill's passage, noting its potential to improve cash flow, strengthen business operations, and expand access to credit for Nigerian companies.

Industry stakeholders have long argued that the absence of a clear legal framework has hindered the growth of factoring in Nigeria, despite its potential to improve liquidity. With the Senate's approval, lawmakers anticipate that the new legislation will increase confidence among financiers and businesses involved in receivables financing. This is expected to align Nigeria's commercial laws with international best practices, enabling businesses to expand operations, create jobs, and compete more effectively in both local and global markets. The Senate President specifically expressed hope that the bill would help Nigeria balance its trade deficits.

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I also thank the House of Representatives for initiating this, which I believe will help in both domestic and international trade. I thank all of you for your contributions and wish that this will also assist Nigeria to balance its deficits in trade with other countries