Microleasing: An Alternative Way of Financing Productive Assets

by Henry Sempangi and Hermann Messan
Mar 11, 2005
1 min

This note briefly discusses the constraints to microleasing in developing countries in view of the legal and regulatory environment, weak economic conditions, institutional factors and client related factors.

Many entrepreneurs in developing countries find it difficult to expand their businesses because of limited investment capital. This note looks at Microleasing and outlines how leasing helps clients and financial institutions overcome the above difficulties. This note briefly discusses the constraints to microleasing in developing countries in view of the legal and regulatory environment, weak economic conditions, institutional factors and client related factors. It shares the experience from two African Leasing Schemes – FINCA Tanzania, East Africa and GIE Hari Goumo in Timbuktu, Mali. It explores the challenges which MFIs engaged in microleasing schemes may face. Talking about the lessons and opportunities in Microleasing the present note states that microleasing initiatives require strategies to manage operating risks and thereby lists some of the possible strategies.