The Chief Executive Officer, Factoring and Supply Chain Finance Limited, Lanre Bakare has canvassed for receivable financing in order to help businesses especially small and medium enterprises (SMES) stay afloat. He noted receivables financing would serve as an intervention to keep SMEs in business, and cushion the adverse effects of the pandemic as well as protect fragile businesses.
Bakare stated this during a webinar with the theme: ‘Winning at Business during COVID 19,’ sponsored by Factoring and Supply Chain Finance Limited, recently.
Receivables financing is the practice where a business receives funding based on purchases that have been made but haven’t been paid for by the clients.
Bakare noted that receivable financing presents an alternative to the mainstream financing options especially for small and medium sized businesses.
He further explained that since the inception of the pandemic, the economy has witnessed a disruption in supply chain and a continuous depreciation of the naira.
In his words, “Early payment is better than borrowing. SMEs contribute not less than 48 per cent of GDP; 90 per cent of businesses and 84 per cent of employment being created in the economy.
“SMEs with credible counterparties should have a platform where they can discount their invoices to stay afloat in a time like this. The greatest financial relief anyone including the government can give SMEs in a time like this is a funding window that will accelerate the payment of over-due Invoices and their account receivables.” Bakare said.
Bakare equally advised the federal government to provide funding opportunities for small and medium scale enterprises (SMEs) in the country.