Leasing market volume surges to 100 US dollars

Daily News;

The leasing market volume has since May 2005 grown to around 100 million US dollars or three per cent penetration in financing investment in the Tanzanian economy, Ambassador of Switzerland, Mr Adrian Schlapfer said during a workshop themed on Moving Leasing Forward, held in Dar es Salaam recently.

Previously, it had been at about $20 million US or 1 per cent penetration. “The Tanzania leasing programme is a success,” said Mr. Schlapfer. Schlapfer noted that the programme had met its objectives to initiate the market, set up a legal and institutional basis for leasing, to promote the development of a leasing association and to build capacity in leasing companies and banks.

In July, Tanzania’s law on financial leasing became operational. The International Finance Corporation has set up the Africa Leasing Facility to spread the Tanzania programme across Africa on a regional basis and based in Senegal. “The potential of the leasing market in Tanzania is really huge.

Now we are convinced after our SECO-IFC leasing programme implementation, that the legal environment and the taxation in Tanzania is one of the (most) favourable environments in sub-Saharan Africa,” said Africa Leasing Facility programme manager, Mr. Riadh Naouar.

However, Mr Isaac Dallushi, Vice-President of Tanzania Chamber of Commerce, Industry and Agriculture expressed concern on when a registrar of leasing would be appointed. “Believe in your market, believe in yourself and the IFC will be here to support the leasing association and the leasing market, today and tomorrow,” said Mr Naouar.

He said that the aim of the IFC was to improve people’s lives, something possible since leasing could help small and medium sized enterprises that were left out of borrowing opportunities from micro-finance and do not have the resources to offer collateral.

He believed that Tanzania was set to reach five per cent penetration, meaning that five per cent of financing of all investments in Tanzania would be through leasing next year, instead of as projected in 2011. MP Dr Juma Ngasongwa was also in attendance and thanked the IFC for its role in widening the perspective of the leasing sector.

“Now it is in the right direction to enable our people – farmers, contractors and so on - to get access to equipment and improve their living conditions,” said Dr. Ngasongwa, noting that the leasing programme was in line with his own interest in economic empowerment for Tanzanians. The IFC leasing programme, which was funded withUS$1.1 million from the Swiss State Secretariat for Economic Affairs (SECO), officially ends on Dec. 31 this year.