SENATOR EKPENYONG LEADS SENATE DEBATE ON FACTORING REGULATION BILL TO EMPOWER MSMES AND BOOST CASH FLOW
✓ Bill Seeks to End Delayed Payments, Strengthen Financial Access, and Accelerate Growth for Nigerian Small Businesses Under SEC Regulation
By Amawu, Cletus Albert Amawu.
Abuja, Nigeria — The Nigerian Senate on Thursday took a significant step towards strengthening the nation’s business environment as Senator Asuquo Ekpenyong led the debate on the Factoring Regulation Bill, 2024 (SB. 474), a transformative piece of legislation designed to address one of the most persistent challenges faced by Micro, Small, and Medium Enterprises (MSMEs): delayed payments.
Presenting the bill before his distinguished colleagues, Senator Ekpenyong emphasised that the proposed legislation provides a “sustainable, market-driven solution” to the cash flow crisis that frequently hampers the operations and growth of MSMEs across Nigeria.
“Every day, small businesses across our country deliver goods and services, issue invoices, and then wait months before receiving payment,” he said. “This delay cripples cash flow, stalls production, and limits their ability to hire and grow.”
The Factoring Regulation Bill aims to enable small businesses to redeem their unpaid invoices for cash through financial institutions at a small discount, a process known as factoring. This mechanism allows entrepreneurs to unlock funds tied up in receivables, restock sooner, expand faster, and avoid resorting to high-interest, collateral-backed loans.
“The Factoring Bill provides a sustainable, market-driven solution to this problem, the opportunity for MSMEs to quickly redeem their invoices for cash,” Senator Ekpenyong explained. “Thereby empowering Nigerian businesses to restock sooner, grow stronger and hire faster without resorting to expensive, collateral-backed debt.”
He further clarified that the bill is not another credit scheme, but rather a structural reform that builds the financial resilience of businesses by linking financing to their performance and sales, rather than their assets.
“This is not just another credit scheme,” he added, “but a structural reform that empowers our entrepreneurs to grow on the strength of their sales, not their fixed assets or collateral.”
According to the senator, the bill also establishes a transparent legal and regulatory framework under the auspices of the Securities and Exchange Commission (SEC) to ensure accountability, investor confidence, and protection for MSMEs.
The framework, when enacted, will formalise and regulate factoring transactions, a practice already thriving in other emerging economies, to attract both domestic and foreign investment into Nigeria’s MSME sector.
Senator Ekpenyong expressed deep appreciation to his colleagues in the Senate for their robust engagement and overwhelming support, as the Factoring Regulation Bill, 2024, successfully passed Second Reading.
“I am deeply grateful to my distinguished colleagues for their robust support as the Bill passed Second Reading,” he said.
The passage marks a pivotal step toward modernising Nigeria’s financial architecture, promoting ease of doing business, and empowering millions of entrepreneurs who form the backbone of the nation’s economy.
When enacted, the Factoring Regulation Bill, 2024, is expected to significantly reduce MSME vulnerability to delayed payments, stimulate productivity, and enhance job creation across sectors, aligning with Nigeria’s broader economic diversification and industrial growth agenda.
