Leasing business in Nigeria records N4.83 tr turnover in 15 years
Equipment leasing business in the country has recorded N4.83 trillion turnover in the last 15 years.
The Chairman of Equipment Leasing Association of Nigeria (ELAN), Chuka Onwuchekwa, stated this while passing comments on the country’s economy.
According to him, since its inception in the country, leasing has been supporting economic development. “Today, the impact of leasing is pronounced in all sectors of the economy, enhancing capital formation, generating employment and creating wealth’, he said.
He pointed out that equipment leasing has been established as a creative financing alternative that facilitates access to capital equipment, saying that the whole essence of leasing is to enhance the planning, improvement and development of any economy by building and supporting productive ventures.
‘’Leasing is becoming more relevant in our prevailing situation where access to finance, especially for Small and Medium Scale Enterprises (SMEs), is difficult,’’ he said.
Onwuchekwas explained that as the government and businesses continue to feel the crunch of limited funds, it becomes imperative to seek innovative ways to acquire the capital equipment need to enhance production and achieve the desired economic growth.
‘’One of such ways is leasing, which can facilitate easy and convenient access to the much needed capital equipment in these challenging times. To a large extent, these present opportunities for the leasing industry, as more businesses and institutions turn to leasing to meet their needs,’’ he said
Harping on the imperative of leasing in growing the economy, Onwuchekwa explained that essentially, leasing is expected to play a major role in the diversification and other developmental agenda of Government. The planned huge investment in infrastructure, agriculture, mining and job creation, creates a wider scope for leasing participation in meeting the expected demand for capital equipment.
The chairman however advised that while the opportunities for the leasing industry are real, it is imperative for the industry to position itself to play actively at these times. The capacity of the industry needs to be strengthened to enable it perform its developmental role effectively. Appropriate funding mechanism and regulations are key ingredients in this regard.
Highlighting the Equipment Leasing Act of 2015 is a major achievement in the area of regulation as he said it laid the foundation that would stimulate leasing, creating sanity, certainty and encouraging more investments.
However, the funding challenge remains critical as most practitioners rely on short term sources mainly banks for funding. These sources are not appropriate for leases which ideally should be a medium to long term financing.
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