October 27, 2016 By Ibrahim Tarawallie
The International Finance Corporation (IFC) of the World Bank Group, in collaboration with Sierra Leone Investment and Export Promotion Agency (SLIEPA), will today hold a finance leasing investment forum at the Bintumani Hotel in Freetown to explore investment opportunities in the country.
The forum would be part of the development of leasing as a viable alternative financing solution for micro, small, and medium enterprises, since access to finance in the country is one of the major constraints hindering the growth of Small and Medium Enterprises.
The forum would provide an overview of leasing investment opportunities and regulatory framework in the country, as well as hold a panel discussion on how to implement leasing.
During a recent engagement with journalists, IFC Communications Consultant, Finance and Markets Global Practices in the Africa Region, Pauline Delay, defined leasing as a contract between two parties – the lessee and the lessor – where the lessor provides an asset to the lessee for a specific period of time in return for specified payments.
She stated that leasing could help increase local production and productivity, adding that most leasing equipment, though imported, assisted in boosting local production and cut down on imported consumer goods.
According to her, leasing could aid the development of infrastructure through the provision of equipment to contractors in the execution of government contracts.
“Leasing offers more follow-up opportunities with the client, as he or she must be present to exercise the purchase option. The leasing company can therefore offer new financing and follow-up with the client,” she said, adding that leasing requires simpler procedures than lending, as no collateral was required.
She noted that in leasing, collateral was seldom required because the leased goods served as the security for the finance advanced, and that the lessor retains ownership of the asset and in the event of default, he can repossess the goods in a relatively straightforward process.
Ms. Delay highlighted the lack of specific legal framework for leasing, insufficient specialised courts, long, drawn-out procedures, insufficient capacity building and training for magistrates and judges on leasing as some of the challenges of leasing.