There is a legal principle that “ignorance is not a defence”. Although leasing is a banking instrument and not a legal one, the idiom is still relevant. Rwanda.
The economy could be transformed if more people were aware of the business development and wealth creation opportunities the leasing industry in the country could offer.
Many people relate the concept of leasing to acquiring extremely expensive equipment. However, micro-leasing is a viable option; one can acquire simple equipment to boost productivity without necessarily presenting collateral.
This was revealed by experts at a 2 day training workshop that was held on 15th and 16th December at Novotel Hotel. This workshop aimed at increasing capacity and creating public awareness on the importance of leasing, through the mass media.
The training which was organized by the International Finance Corporation (IFC), an arm of the World Bank, attracted over 60 journalists from different media houses nationwide.
Brian Kirungi, of the Competitiveness and Enterprise Development Project Leasing Program Team, while speaking at the opening of the training programme, said that the leasing industry in Rwanda was under-utilised, despite being in existence for 2 years now; it was only through the media that essential information about the leasing industry can be passed on to the public, he believed.
A lease is simply a contract between an institution giving the lease (leaser), usually a bank, and the individual asking for the lease (lessee), giving the lessee possession and use of a specific asset on payment of rentals over a certain period.
The lessor retains ownership of the asset so that it never becomes the property of the lessee or any other related third party during the tenure of the lease.
Under the theme, “Exploiting Commercial and Development Opportunities in the Land of a Thousand Hills,” the campaign emphasised competitiveness and enterprise development through the leasing in Rwanda.
In a bid to turn the private sector into the country’s main engine of growth, as Vision 2020 stipulates, the IFC, as a private sector-supporting organisation, has decided to promote the practice of leasing assets for income generation through commercial banks.
The programme is aimed at stimulating the country’s economic growth through effective application of leased equipment; leasing is a convenient financing alternative for capital acquisition that applies to small and medium-sized enterprises.
Kirungi stressed that the leasing industry was receiving funds from IFC and offered plentiful opportunities to the business community given the fact that the Government of Rwanda had enacted a positive leasing law in 2005.
Interest rates are low in Rwanda, in comparison to other countries in the Great Lakes Region, which should be a major incentive towards encouraging enterprises towards the lease products offered by local banks such as BCR, FINA Bank and Banque Populaire.