Overall, the Factoring Assignments Bill presents one of the best opportunities to introduce something new and impactful into the regulatory environment for MSMEs in Nigeria. Despite the increasing prominence of factoring globally and in Africa, Nigeria is yet to tap into this financing mechanism. According to the Afreximbanki, which is the major promotor of factoring in Africa, the continent accounted for less than 1 per cent of global factoring volumes in 2017. The Bank also noted that factoring volumes in Africa grew from Euro 14.9 billion in 2009 to approximately Euro
22.3 billion in 2017, with most of those volumes concentrated in South Africa, Tunisia, Morocco, Egypt, Mauritius, and Kenya. Enacting this Bill into law is a critical step in positioning Nigeria to take advantage of the African factoring market which is projected to reach about Euro 200 billion by 2021. This would go a long way in closing the trade/MSMEs finance gap in the country.
The Factoring Assignments Bill is one of the Bills that got to an advance stage (Committee stage in the House of Representatives) but could not be passed by the 8th Assembly. The rather unwieldy Long Title of the Bill says it is a “Bill for Act to establish Factoring Assignments Act to provide for principles and to adopt rules relating to the assignment of receivables in order to create certainty and transparency and to promote the modernisation of the law relating to assignments whilst protecting the existing assignment practices and facilitating the development of new practices and
ensuring adequate protection for the interests of debtors in order to promote the availability of capital and credit and to facilitate domestic and international trade and for related matters”.
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