The Senate Wednesday considered a bill seeking to establish a legal framework that would enable small and medium-sized businesses to access quicker financing by converting unpaid invoices into immediate cash.

Leading debate on the proposed legislation titled, “Factoring Regulation Bill, 2024,” Asuquo Ekpenyong who sponsored it, said the proposal aims to address delayed payments which are the most persistent challenges faced by micro, small and medium enterprises (MSMEs).

Ekpenyong noted that across Nigeria, MSMEs often deliver goods or services and then wait up to 90 days before receiving payment, a situation that leaves many unable to pay workers, restock supplies or expand operations.

“This cycle of weak cash flow not only traps small businesses but also slows down our economy’s overall growth,” he said.

The lawmaker described the bill as a structural reform designed to unlock working capital for over 40 million small businesses that form the backbone of the Nigerian economy.

He said factoring the practice of selling verified invoices to a licensed finance company or bank at a small discount in exchange for immediate payment, offers a tested solution to MSMEs’ cash-flow constraints.