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We are excited to announce our digital online training programme! Our first course, Mastering Lease Administration: Navigating the Leasing Lifecycle for Business Growth, is now live.

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2025 TRAINING CALENDAR

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WELCOME ADDRESS BY EHIGIAMUSOE ELIZABETH NGOZI (MRS), CHAIRMAN, BOARD OF DIRECTORS, EQUIPMENT LEASING ASSOCIATION OF NIGERIA (ELAN) AT THE 22^ND NATIONAL LEASE CONFERENCE HELD ON THURSDAY, 14^TH NOVEMBER 2024 AT RADISSON  BLU HOTEL, IKEJA LAGOS.

The Registrar/CEO, Equipment Leasing Registration Authority

Distinguished Special Guests

Esteemed Guest Speakers and Panellists

Directors and Members of ELAN

Gentlemen of the Press

Ladies and Gentlemen,

On behalf of the Equipment Leasing Association of Nigeria (ELAN), I am delighted to welcome you to the 22^nd Annual National Lease Conference organised by ELAN. I am especially honoured to welcome our Special Guests, esteemed Guest Speakers/Panellists, and other dignitaries. We sincerely thank you for creating time to honour our invitation despite your very busy schedules.

This event is the biggest annual leasing gathering that brings together industry experts, policymakers, and other stakeholders to explore the potential of equipment leasing as a dynamic and innovative financing alternative, discuss pertinent issues affecting the development of the leasing industry and the economy at large, as well as fostering collaboration and networking among stakeholders.

The theme for this year’s event “EQUIPMENT LEASING: THE CREATIVE FINANCING ALTERNATIVE IN TODAY’S REALITY” is intended to highlight the developmental attributes and imperatives of equipment leasing to stimulate production and create wealth to enhance the overall capacity of the economy during this critical period in our nation’s history.

The Nigerian economy has been walking on its knees for some time now, as major indicators showed adverse performance, against the background of global economic uncertainties, geopolitical tensions, and the continued impact of the COVID-19 pandemic as well as increasing domestic macroeconomic vulnerability. The twin cardinal policies of the Federal Government – the subsidy removal and floating of the Naira, hailed as bold reforms in taking the economy out of the woods, have equally brought considerable hardship in the land, with astronomical increases in the cost of goods and services.

In the financial space, the Central Bank of Nigeria’s (CBN) continued increase in the Monetary Policy Rate (MPR), which aims to curb inflation, seems to be achieving limited positive results as the price indices remain high. The recent increase of the MPR to 27.25%, implies that the cost of borrowing will increase to around 40% thus, further constraining businesses and consumer spending.

The Government, however, continues to re-echoe its economic agenda “the Renewed Hope Agenda “aimed primarily to revamp the economy and improve the quality of lives of Nigerians. The government must be proactive and adopt value-added initiatives that facilitate the speedy attainment of the agenda. One such initiative is Equipment Leasing. Essentially, leasing can play a major role in facilitating the various developmental initiatives, ranging from access to capital for individuals and businesses, food security; poverty eradication, inclusive growth, and job creation to supporting initiatives in transportation including that of the CNG vehicles.

Indeed, Leasing has been established globally as the creative financing alternative, generating an annual average of over $1.5 trillion in new business volume and contributing about 1.5% to global GDP. In Nigeria, since its inception leasing has been supporting economic development. Today, the impact of leasing is pronounced in all sectors of the economy, enhancing capital formation, generating employment, and creating wealth. Outstanding leases in Nigeria in 2023 amounted to N4.19trn as against N3.25trn in 2022 representing 28.7% growth and has contributed more than N20.4 trillion to capital formation in the economy.

Leasing remains a compelling alternative as we navigate the complexities of our challenging economy, offering efficient and flexible financing solutions to meet the diverse needs of the user. This is a very important tool for businesses, especially the Micro Small, and Medium Scale Enterprises (MSMEs), empowering them to acquire the assets they need to grow and thrive amid increasing costs.

Development partners like the World Bank and governments around the globe have been advocating and utilising leasing to finance critical assets across various sectors of the economy, ranging from transport, power, agriculture, and mining to medical infrastructure. In Kenya for example, the government has been using leasing for official government transport, aimed at delivering efficient and economically viable transport solutions across various governmental departments. The initiative has not only revolutionised governmental transport operations but has also yielded substantial impacts on employment and the local automotive industry, boasting a fleet of over 8,000 vehicles and generating 1,813 employment opportunities, while indirectly supporting an estimated 100,000 jobs.

In today’s reality in Nigeria, where there is a need for resource optimisation, all tiers of government should deepen their participation in public sector leasing. This model conserves capital and provides flexibility, enabling public entities to access essential equipment, technology, and infrastructure without significant upfront investment, leading to cost savings and avoidance of waste. By reallocating capital from asset acquisition to more strategic endeavour, governments can maximise their impact and deliver greater value to the citizenry.

While encouraging the government and businesses to embrace leasing given its significant developmental attributes to the economy, it is crucial that key stakeholders, especially the Government, strengthen their support for the industry to harness its full potential. For instance, the enactment of the Equipment Leasing Act 2015, has ushered confidence in the industry and is expected to stimulate more investment. It is gladdening to note that, the Equipment Leasing Registration Authority (ELRA) established by the Act to support its implementation, will soon come into full swing. What to add is that, ELRA must be proactive and support the development of the Nigerian Leasing industry. Also, the issue of appropriate funding mechanisms for the industry remains a growing concern. We continue to engage private financiers in this regard while reiterating our call on the Government to allow leasing access to the various intervention funds. Indeed, by working together, we can drive the growth and development of the leasing industry in Nigeria.

Distinguished Ladies and Gentlemen, the stage is set to take this conversation further. I am confident that this conference will stimulate insightful discussions, generate innovative ideas, and contribute to the advancement of equipment leasing as a powerful tool for economic growth and development. I encourage all of us to engage actively in the sessions, share experiences, and build lasting partnerships.

Finally, I express once again my sincere gratitude to the speakers and sponsors for their invaluable contributions to this event. I also extend my heartfelt appreciation to all of you for taking the time to attend.

Welcome to the 22^nd National Lease Conference. I wish us a fruitful engagement.

Thank you.

HOW TO USE EQUIPMENT LEASING TO GROW YOUR BUSINESSES

Leasing is the creative financing alternative of today because it meets diverse needs. A lease is an agreement whereby the lessor (owner of equipment) convey to the lessee (user of equipment) the right to use the asset for an agreed period of time, in return for a payment or series of payments.

Below are the reasons why this is so

• Alternative source of capital financing: Leasing  provides an alternate source of financing where a company is faced with tight credit terms, bank lending restrictions or other economic factors. It is a prudent means of equipment acquisition. It releases credit lines that can be used for other purposes, ie. It allows for full use of borrowing capacity.
• Affordable means of acquiring equipment: Leasing provides an affordable avenue for lessees (user of equipment) to acquire the much needed asset with minimal initial payment. This is because payment constitutes very small fraction of the equipment cost, which is spread over the lease period.
• Flexibility in lease rental payment: Lease payment can be made to coincide with earnings generated from the use of the equipment. This is particularly advantages in a situation where companies have seasonal income.
• Longer payment terms than other forms of credit: Leasing affords the lessee the opportunity of payment over a longer period than with most other forms of financing. This allows the lessee the opportunity of reducing financial commitments particularly in times of distress.
• Easy accessibility of equipment: Lease facilities are often easier to obtain than loans. Equipment under lease, while providing facility for use, also serves as collateral for the lease since ownership actually resides with the lessor (owner of equipment). Hence, in the event of a failure on the part of the lessee to pay, the equipment can be retrieved by the lessor.
• Budget limitations: Acquisition of equipment not complemented by capital expenditure budget can sometimes be accomplished through lease with rental payments classified as operating expenses.
• Technology considerations: When firms purchase equipment, they face the possibility that at some time the asset may not be efficient as recently manufactured ones. The lessor may elect to obtain the new version for the lessee, if the latter desires.
• Collateral: There is usually no need for additional security or collateral for a lease. Generally, the equipment serves as security.
• Risk of leakage: There is reduced risk of leakage in equipment leasing transaction, since the lessee does not receive cash. The lessor purchase and supplies the equipment thus reducing the diversion of funds.

Reasons to Choose Equipment Leasing over a Loan

In a world of ever-decreasing human interaction, why would someone seek the help of an unfamiliar leasing company when their local banker calls them by name? We will tell you why:

1. The first major difference between a lease and a loan is collateral. A loan will automatically require a collateral before it can be granted, leases does not require any form of collateral, because the leased asset will stand as the collateral, making leases the easiest and most convenient means of asset acquisition you can get.
2. Leasing provides additional source of credit to the customer asides the traditional financing methods. Leasing does not limit the capacity of the customer to borrow unlike loan that most cases have restrictive covenants
3. Leases are in terms of time and costs involved in negotiating terms and conditions of each financing alternatives.
4. Leasing is highly flexible, than loans in terms of rental payments . Essentially, leases can be packaged in various forms to meet the cash flow and circumstances of the customer. Rentals can be even, skipped  or step up or step down not readily available in loans
5. Lease rentals are generally fixed outflows unlike loans that have interest rates that change with market conditions.
6. Leases give the customer options to either return, renew, or purchase the asset at the end of the lease unlike loans

Equipment leasing advantages:

A lease facility is generally easier to package, and takes fewer days to deliver, with few financials or paperwork requirements. Leasing transactions can be packaged to include delivery, installation, training, hardware and software and services etc.

Another interesting area in leasing is the rental payment. Rentals can be structured to meet the cash flow of the lessee, which can be done monthly, bi-monthly, quarterly, half yearly or otherwise. For instance, a school proprietor that acquire a school bus or power generating sets through leasing may decide to be paying rentals only during the school session while no payment is done during the holidays period. This gives greater flexibility as well as renewed focus on its core business.

This important choice of asset acquisition model should be based on your business’ requirements and circumstances. With ELAN we help you take the time to get to know you and understand your business goals and objectives, and recommend Lease Practitioners with workable lease solutions, geared towards meeting your business goals and objectives.

How Does Equipment Leasing Work?

Basically, leasing involves productive assets owned by one person (the lessor) but used by another person (the lessee) in return for periodic rentals, resulting in convenient and predictable cash flows for the lessee.

Equipment Leasing services are being provided by leasing companies. A Lessee (user of asset) approaches a Lessor (owner of asset) for a lease facility, stating the equipment needed and the purposes it is expected to serve. The lease is approved after meeting the requirements of the Lessor, the asset is delivered and the transaction commences. Due to the installment payments in a lease, the lessee is able to obtain the use of an asset without tying up scarce funds needed to acquire the asset.

For instance, a small construction company needs to purchase a bulldozer for expansion purposes. The firm rather than tying the huge sum of money on this single asset and become cash-strapped, the firm may go for leasing. Accessing this equipment through leasing, releases its funds for other productive ventures such as working capital. The firm is now enjoying the benefits of this new equipment while paying the rentals over time.

Basically, there are 2 types of leasing: Finance and Operating Leases. Under finance leases, the lessee uses the asset while paying rentals. The intention of the lessee is to own the asset at the end of the transaction, while under operating leases, the lessee uses the asset and later returns it to the lessor.

In other to further assist your search for a credible leasing service provider, The Equipment Leasing Association of Nigeria (ELAN) can guide prospective lessees to credible lessors faster.

What to Look for in a Leasing Service Provider?

Now that you understand a little bit about lease financing, you will need to know what to look for in a leasing service provider. Financing, leasing and loans can be a tricky business.

The important qualities to note are knowledge, integrity and reputation, diversity of product, flexibility and responsiveness along with industry ratings. A leasing company with the ability to lease assets with high level of understanding of the lessees’ needs is important when selecting a leasing company.

Leasing makes better sense, DON’T BUY IT, LEASE IT…

Need to know more on how equipment leasing can be useful to you and how you can get paid from leveraging it? visit www.elannigeria.org to download our resources and follow our social media pages for more updates. You can also speak to leasing expert or contact us info@elannigeria.org, 08035415478, 08023176691.