Three years ago, the Government of Rwanda enacted the Leasing Law to govern leasing operations in the country. However, while banks and other financial service providers are ready to offer the leasing product to the business community, the turn up still remains relatively low and only a few corporate companies have so far utilised the leasing facilities offered by different banks in Rwanda.

Small and Medium Enterprises (SMEs), which could benefit from the new product, have ignored the leasing facilities that the financial institutions offer. Why is this so? Is it the bank’s fault? 

What the Banks say

Most banks offering leasing facilities have varying conditions a client has to meet before a lease partnership is entered. However most of them boil down to the integrity of the person acquiring the lease.

Once a person provides the necessary documentation and details required by the bank, then a lease deal can be completed in a period of 2 weeks.

According to Aline Batamuriza, a leasing agent at Rwanda Commercial Bank (BCR), problems usually arise because individuals don’t meet the banks requirements; this then requires the bank to carry out extensive research or ask the client for more documentation.

"There’s no bureaucracy in the leasing procedure, as many say, the delays originate mainly from the customer,” argues Batamuriza.

BCR leases to everyone and not necessarily established businesses as many think; everyone with a good business plan or proposal stands a chance to enter a lease deal with the bank.

BCR finances transferable and identifiable equipment with serial numbers such as vehicles, tractors and generators. Just like other banks in the country, BCR will only lease assets if the individual can raise 30 percent of the purchase price and the bank finances the remaining 70 percent.

"The 30 percent is for the lessee to show his or her commitment to the transaction and because the bank has no money of its own. We use other people’s deposits and there is need for both parties to commit to the deal,” explains Kenneth Agaba, FINA Bank’s Executive Director in charge of Business Banking.

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