Three banks involved in the leasing industry have partnered with World Bank’s International Finance Corporation (IFC) to form an association that promotes leasing in Rwanda.
The association that will also act as a voice for the leasing sector is dubbed the Rwanda Leasing Association. The banks involved include the Commercial Bank of Rwanda (BCR), Development Bank of Rwanda (BRD) and FINA Bank.
The leasing program allows many businesses in the country to acquire assets without collateral security.
The formation of the association comes at a time when the leasing sector in the country has grown significantly in the past years being estimated at $20m (Frw10.8 billion).
Brian Kirungi, IFC’s Legal Specialist, said "Establishing an association for the leasing sector will help create a sustainable platform for championing the interests of all stakeholders, and strengthen the sector."
It will also enable leasing providers to pool resources to educate the public on the benefits of leasing as a source of financing for small and medium businesses, Kalungi said. IFC promised to continue with the technical and financial support to the association.
FINA Bank’s Managing Director, Steve Caley, was elected the association’s first chairman. He will be assisted by the BCR Managing Director, David Kuwana and the Deputy Director General of BRD, Jack Kayonga.
"The association is a strong voice for those in the leasing sector in the country to bring about economic development of Rwanda," Caley said.
Caley urged other financial institutions and other stakeholders in leasing business including Rwanda Revenue Authority (RRA), warehouses and car importers to join the association and enjoy economies of scale for the development of small business.
Leasing programme in Rwanda
The programme is a joint partnership between IFC, the Dutch Ministry of Foreign Affairs, through the Netherlands Partnership Programme and the government of Rwanda through World Bank’s Competitiveness and Enterprise Development Project (CRDP).
It promotes sustainable private sector investment, helps reduce poverty and improves people’s lives hence increasing domestic investment.
The program was to create new financing opportunities for businesses in the country by promoting leasing as an alternative financing.
The IFC Rwanda CEDP Leasing Development Programme has components focus on legislative review, capacity building, business development and support to leasing association.
Legislative review programme is for enhancing the legislative, tax and accounting environment for leasing in Rwanda.
Capacity building provides customised and general training sessions for lessors, lessees, government officials and other stakeholders in the leasing industry.
Business development aims to create opportunities for new local and foreign investment in leasing through developing linkages between lessees, equipment manufacturers and financial institutions.
Public education and support to Rwanda Leasing Association is to build the interest and knowledge of leasing among stakeholders and potential lessors and lessees.
This also assists in developing the capabilities of the Rwanda Leasing Association in research, training, information dissemination, promoting closer relations, championing the interests of lessors, publishing journals and lobbying.