The Managing Director, Nigeria Export-Import Bank, Mr Abba Bello, has said that the Factoring Financing Bill, when passed into law, will improve Nigeria’s share of intra-African trade.
He said this in a presentation made at a programme on factoring organised by the Nigerian Export-Import Bank.
Factoring is a financing method in which a business owner sells accounts receivable at a discount to a third-party funding source to raise capital.
Bello stated that since it was becoming difficult for small businesses to raise funds from banks to finance their operations, there was a need to come up with an alternative financing instrument that would facilitate trade
This, he noted, would help to reduce the level of unemployment in the economy and create wealth for the people.
He said, “The Nigerian Export-Import Bank is quite concerned about the high level of informal trade in Africa, with informal non-oil exports recently estimated at a minimum of $12bn annually in Nigeria as against recorded non-oil export trade averaging about $3bn annually in recent times.
“While this challenge is a reflection of the large informal economy, it is also symptomatic of the poor access to export credit, particularly among the Small and Medium Enterprises, who are the principal players in cross border trade.”
He added, “Empirical data released by the Central Bank of Nigeria indicate that less than one per cent of the total loans and advances disbursed annually were allocated to the non-oil export sector over the years.”