The National Bank of Ethiopia (NBE) has licensed the first foreign leasing comany namely ethio lease to provide equipment leasing and financial solutions to different businesses in the country.Ethio Lease is a subsidiary of Africa Asset Finance Company Inc. (AAFC), a US-headquartered equipment finance firm that owns and operates a group of companies that provides asset backed lending and leasing services throughout Africa.
Talking about the significance of the launch of ethi-lease, board chairman of the Ethio-lease Girma Wake said “leasing high equipment could have potentially transformative impact on Ethiopia because it allows companies to free up their liquidity and generate revenue without having to heavily invest in equipment. A leasing agreement would also allow companies to pay for equipment as it generates revenues for them.
With investment capital of the $14 million, ethio lease will be providing leasing service for farmers to get tractors, combiners and other agricultural materials. Ethio lease will also be engaged in
health sector by leasing MRL and scanning machines and other equipment.
In 1998, Ethiopia enacted a law alowing foreign companies to engage in leasing equipment and the law was revised in 2013, but no foregn firm has opened the business for no obvious reason since then.
In Ethiopia, agriculture, manufacturing, road building sectors do not have adequate capital equipment to sustain the type of development the country needs and the equipment that ethio lease would import would help the nation to attain the development goal it aspires, said Girma during oficial launch of the etho lease in Addis Ababa on Thursday.
Ethio lease would also engage in leasing equipment to hosplitality and communication businesses to the extent of building data center to lease to the teleocm compnaies, Girma said.
The development bank of Ethiopia have been leasing equipment for priority projects and five regions were also engaged in leasing service to cater the needs of regional governments.
With nine shareholders, two of whom Ethiopians, ethio lease will not be engaged in leasing equipment that could be made by local companies, it was learnt
Ethio-lease offers long term leases known as capital leases, which provide companies and individuals with lease contracts that cover the significant portion of the economic life of the purchased equipment. depending on the equipment , ethio lease will ensure that companies which will lease equipment adher to proper operations, maintenance upkeep, health and safety and adequate storage through out the lease period, Girum Tsegaye CEO of ethio lease has said.
Ethio lease will aquire the equipment in foreign currency and provide companies with the equipment they need their business operations using local currency.
According to the CEO, the lessee will not be required to present any thing as a collateral but ethio lease will own and oversee the maintenance including proper use of leased equipment.