The Nigerian Export Promotion Council (NEPC) has included factoring and forfaiting as one of the workstreams in the Export Expansion Facility Programme to use as an instrument of financing export and trade.
The Executive Director/ Chief Executive Officer of Nigeria Export Promotion Council (NEPC), Olusegun Awolowo, made this known in Abuja at the first International Conference on Factoring and Forfaiting Service in Nigeria stating that the Council is responsible for promoting non-oil exports in the diversification of the economy.
He said it was in fulfilment of this mandate that the Council included factoring and forfaiting as one of the workstreams, noting that factoring is a financial transaction where a business sells its account receivables (invoice) to a third party called a factor at a discount in exchange for immediate money with which to finance continued business.
According to the ED, factoring is one of the fastest-growing instruments for structured trade finance in the world.
A report by the Pricewater House Cooper PwC stated that factoring could unlock over $1billion yearly in financing for small and medium enterprises (SMEs).
It is also directed at solving most of the challenges MSMEs face with traditional banking, such as excessive interest rate, credit profile constraints and insufficient collateral.
Awolowo said factoring gives MSMEs, particularly those with high-quality receivables, access to cash flow and capital to help maintain and grow their businesses. Factoring is a viable and long term solution to the problem of liquidity and availability that threatens the growth of Nigerian small and medium-sized enterprises.
The Minister, Industry Trade and Investment, Chief Adeniyi Adebayo, expressed satisfaction with NEPC being at the forefront of such a productive initiative alongside the private sector and all other stakeholders. He said the gradual export growth is encouraging due to the implementation of the zero oil plan by NEPC.
To read more, read the article here.
Source: The Nation Newspaper
Author: Franca Ochigbo, Abuja