A LONG TIME COMING
Billions of naira are trapped in Nigerian supply chains today. Not because they have been lost or misappropriated, but because they are locked inside legitimate invoices awaiting payment.
Every day, businesses deliver goods, complete services, and fulfil contracts. Yet payment often arrives 30, 60, or even 120 days later. During that wait, salaries must be paid, suppliers must be settled, and growth opportunities must be funded. Businesses are left in the paradoxical position of being profitable on paper but cash-constrained in reality.
This is one of the most persistent constraints to business growth in Nigeria. Millions of MSMEs operate in supply chains where payment cycles routinely exceed available liquidity, leaving capital tied up in receivables—verified, but inaccessible.
The solution is not new. Globally, receivables finance enables businesses to convert invoices into working capital without additional debt. Nigeria has long had the demand but lacked the legal framework to scale it.
That may be about to change.
This week, the National Assembly passed the Factoring, Assignments and Receivables Financing Bill 2026, now awaiting presidential assent. Once enacted, it will provide Nigeria’s first comprehensive legal framework for receivables finance, bringing certainty to suppliers, buyers, and financiers while unlocking significant working capital across the economy.
For years, the structural response to Nigeria’s working capital problem has been constrained not by lack of appetite, but by the absence of law. That constraint has now been removed.
THE PROBLEM WITH THE OLD MODEL
For most Nigerian SMEs, the conventional response to a cash flow gap is to borrow. But traditional lending has a structural blind spot that lower interest rates alone cannot fix.
Banks lend against assets, property, equipment, inventory. The most valuable thing many Nigerian suppliers hold is a confirmed invoice from a creditworthy buyer. Under traditional banking, that invoice carries no financing weight. It simply waits.
The result is a paradox that has constrained Nigerian supply chains for decades. A supplier can be delivering on contract, maintaining relationships with large corporates, growing her order book, and still face a liquidity crisis every sixty to ninety days because her capital is trapped in the payment cycle.
Receivables finance solves this by inverting the credit model entirely. The supplier is not evaluated on her own balance sheet. She is evaluated on the creditworthiness of her buyer. A Nigerian SME delivering to a large corporate can access financing at terms far better than her own profile would ordinarily allow.
Under traditional banking, a confirmed invoice from a creditworthy buyer has no financing value. Under receivables finance, it has everything.
WHAT THE LAW WILL MAKE POSSIBLE
The Factoring Bill does not introduce a new financial concept; it strengthens an existing one by providing the legal certainty required for scale.
Previously, factoring operated in a grey area, with anti-assignment clauses, unclear recognition of future receivables, and competing claims limiting market confidence and participation.
Once enacted, the Bill will make receivables assignments enforceable, remove restrictions on assignment, and recognise future receivables, creating a clearer and more predictable framework for unlocking working capital.
It also empowers the Central Bank of Nigeria (CBN) to:
• License and regulate factoring providers.
• Authorise financial institutions and specialised firms to offer factoring services.
• Enable banks to participate under a defined licensing framework
For suppliers, the law provides a clearer and more reliable pathway to convert unpaid invoices into immediate working capital. This is particularly significant for SMEs, which often face cash flow constraints despite having strong customers and healthy order books.
For buyers, the law creates a stronger foundation for supplier finance and reverse factoring programmes, enabling suppliers to access early payment while buyers maintain agreed payment terms. This supports stronger supplier relationships and more resilient supply chains.
For financiers, clearer rules on assignment, enforceability, and priority rights reduce uncertainty and improve risk assessment. The result is a stronger foundation for innovation, increased liquidity, and broader participation in Nigeria’s receivables finance market.
The invoice sitting in your accounts receivable will no longer just a promise of future payment. It will now be a legally protected, financeable asset.
BUILDING THE MARKET BEFORE THE Bill
The Factoring Regulation Bill, once assented to by the President, is expected to attract new participants into Nigeria’s receivables finance market. However, factoring did not begin with the law. Long before this bill was passed, a handful of pioneers were already building the market and demonstrating the value of receivables finance for Nigerian businesses.
One of those pioneers is Fiducia.
Since its inception in 2023, Fiducia has been helping businesses unlock working capital trapped in unpaid invoices by connecting them with financiers through a technology-driven marketplace. In 2024 alone, the company facilitated over ₦1 trillion in transactions. Today, that figure has nearly doubled. Fiducia has financed more than 700 businesses, onboarded over 800 businesses onto its platform, and built a network of 32 financiers.
How Fiducia Works
- A vendor supplies goods or renders services to a corporate buyer.
- The vendor uploads the invoice(s) to the Fiducia platform.
- The corporate buyer validates and approves the invoice(s).
- Participating financiers review and bid on the approved invoice(s).
- Fiducia issues funding instructions to the selected financier.
- The financier disburses funds to the vendor, providing immediate access to working capital.
- On the invoice due date, the corporate buyer pays the financier directly.
What This Means for Your Business
Nigeria’s SME sector has long operated in a system where strong commercial relationships do not automatically translate into accessible liquidity. That structural gap is now being addressed on two fronts: through legislation that has been passed by the National Assembly and is awaiting presidential assent, and through platforms like Fiducia that already enable receivables to be converted into working capital in practice.
For suppliers waiting on invoices, buyers seeking to strengthen supply chain resilience, and financiers looking for high-quality receivables opportunities, the market is clearly evolving.
Invoices have always held value as commercial assets. What is changing now is the legal certainty and market infrastructure needed to unlock that value at scale.
Discover how Fiducia can help your business access working capital faster. Visit www.myfiducia.com to request a demo.
