OPENING REMARK BY EHIGIAMUSOE ELIZABETH NGOZI (MRS), CHAIRMAN, BOARD OF DIRECTORS, EQUIPMENT LEASING ASSOCIATION OF NIGERIA (ELAN) AT THE ELAN/IFC ENGAGEMENT ON FUNDING INITIATIVE, HELD ON WEDNESDAY, 1ST FEBRUARY, 2023 AT LCCI CONFERENCE AND EXHIBITION CENTRE, ALAUSA, IKEJA – LAGOS
The Country Manager, IFC
Distinguished Directors and Members of ELAN,
I am glad to welcome you, on behalf of the Equipment Leasing Association of Nigeria (ELAN), to this engagement on funding initiative, organised by ELAN, in partnership with her development partner, International Finance Corporation (IFC). I also welcome specially, Kalim M. Shah, IFC’s Senior Country Manager for Nigeria, Sierra Leone and Liberia and the entire team of IFC to this engagement on funding initiative for the Nigerian Leasing industry.
Equipment leasing globally, is established as a creative financing alternative that facilitates access to capital equipment. The whole essence of leasing is to enhance the planning, improvement and development of any economy by building and supporting productive ventures. Since inception in Nigeria, 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. The contribution of leasing in the past 10 years is in excess of N14.3trillion and is becoming more relevant in our prevailing economic situation, especially to Small and Medium Scale Enterprises (SMEs). The industry presently ranks 41st among the top 50 leasing markets globally according to the world Leasing Year Book (2023) ranking.
ELAN as the industry’s association has been supporting the development of the leasing industry .Part of this, is its continuous advocacy campaign aimed at creating favourable operating environment , to place the industry on a strong pedestal to fully realise its potential. We have been engaging relevant stakeholders, on the perennial issues facing the industry. One of such issues is that of lack of appropriate funding mechanism for the industry.
Indeed, “Money is the raw material for leasing”, its adequacy, availability and cost, is key to the success of the industry. The absence of appropriate funding mechanism, continues to constrain the depth of lease penetration in the market. The predominance of short-term funds which are even dwindling and expensive, cannot support more meaningful development of the industry thus, confining most leases to within 12-48 months to avoid mismatch. The limited sources and high cost of funds, have constrained the capacity of most lessors to finance more leases and engage in big ticket transaction, thereby limiting their scope to small and medium markets. This issue is becoming more challenging, with the prevailing economic conditions that have further tightened liquidity in the system, and the increasing cost of assets means more money will be need for financing
Over the years, ELAN has been engaging financiers locally and internationally, for an appropriate funding mechanism for the industry. Lotus Capital Limited, for instance, has provided an innovative financing window which some of our members have been taking advantage of. We are equally engaging the Bank of Industry (BOI), and shall brief you as development unfolds. However, the depth and scope of the funding required is more pronounced and as such will need all available funding windows to make the desired impact at addressing the funding challenges
I am excited that today’s event is another opportunity to take these issues further. In this regard, I express our gratitude to IFC for this initiative and wish to state that the industry deeply value this initiative and look forward to the right kind of funding, which will be competitive, long-term, tailor made to the industry’s needs and lead to a win – win situation for lessors and the IFC.
Distinguished members, I encourage us to fully explore this opportunity by proactively engaging the IFC, and I hope that this will lead ultimately to IFC’s investment in the leasing industry through the provision of funds.
Once again, I welcome you all and wish us fruitful deliberations.
Thank you.
EHIGIAMUSOE ELIZABETH NGOZI (MRS)
CHAIRMAN, BOARD OF DIRECTORS, ELAN