Accra, Ghana, April 27, 2018//-The International Finance Corporation (IFC), a member of the World Bank Group launched the ‘Africalease’, an association seeking to promote leasing across sub-Saharan Africa.
To this end, the association is working with the IFC and Swiss State Secretariat for Economic Affairs (SECO) to unlock the sub-Saharan Africa’s $80 billion leasing market.
The association would therefore help smaller businesses from transport, mining, agric and retail obtain the financing they need to grow and create jobs.
The Practice Manager for the World Bank Groups Finance, Competitiveness, and Innovation Global Practice, Alejandro Alvarez de la Campa, noted that leasing continued to help transform the ability of African businesses especially SMEs to acquire the use of equipment for economic activities.
“Working in 25 countries in sub-Saharan Africa, IFC’s Africa Leasing Facility has helped mobilise $257 million in investments into the Regional leasing sector, and delivered leasing training to about 24,000 people, including; the government official, financial institutions, and small business owners”, according to him.
The President of Africalease, Abdallah Benhamida added that the regional equipment leasing market was ready for investment, especially in the agriculture, infrastructure, medical equipment and renewable energy sectors.
He assured that Africalease would endeavour to build a cohesive network to help unlock the region’s $80 billion potential adding that smaller businesses employed about 60 per cent of those with jobs in emerging economies but many were held back by a lack of access to finance.
In her welcome address, IFC Regional Country Manager for Ghana, Benin, Burkina Faso, Guinea, Niger, and Togo, Ms Ronke Ogunsulire, stressed that leasing provided the African businesses a viable financing solution that enabled them to grow and expand.
She pointed out that supporting leasing market development was one way in which IFC was contributing to the World Bank Group’s twin goals of eliminating extreme poverty and creating shared prosperity.
“Over the past six decades, IFC has invested more than $25 billion in African businesses and financial institutions, while our current portfolio exceeds $5 billion.
“IFC will continue to promote sustainable private sector activities and mobilise capital from other investors who invest alongside IFC in critical sectors,” Ms Ogunsulire empasised.
The Deputy Head of Mission, Embassy of Switzerland in Ghana, Matthias Feldman who spoke on the topic- ‘Leasing as a tool to increase access to finance’ , insisted that access to finance was critical for economic development.
It allows businesses to grow and ultimately make important contributions to job creation and reduction of poverty and inequalities. However, in the developing world, 200 million businesses lack access to credit, he said.
“They face many hurdles that are often difficult to overcome include: access credit, they should present a credit history or some form of collateral that they often do not have. The challenge is particularly acute in much of Sub-Saharan Africa, where some 60 per cent of the population is employed in the small and medium-sized enterprise (SME) sector”
The percentage is significantly higher when informal SMEs are included, many of which would not qualify for traditional bank financing, Mr Feldman added.
“At Swiss State Secretariat for Economic Affairs (SECO), we work to promote sustainable inclusive growth and strengthen our partner countries’ resilience and response to economic and financial crises”.
“We believe in the power of increasing access to finance to enable more business owners to create sustainable and successful businesses that are able to weather external shocks and create jobs,” he said.
The event which was organized by IFC and Swiss State Secretariat for Economic Affairs (SECO), also gathered regional leasing investors and experts to discuss Africa’s $80 billion leasing market.
Meanwhile, the first Africa Equipment Leasing Handbook was unveiled at the event.
By Masahudu Ankiilu Kunateh, African Eye Report
