Q. 1. When will TANZALEP begin offering asset leasing?
TANZALEP is not a leasing company; it is a Technical Assistance (TA) / advisory initiative whose objective is to support development of the leasing industry in Tanzania, and thereby improve financing options for small and medium enterprises in the country. TANZALEP will achieve its objectives by implementing five major components which are: legislative and regulatory review, (in view of advising on appropriate and favorable legislative and tax regime for leasing); capacity building for stakeholders (to increase leasing knowledge); business development services for leasing companies, information/public education campaign; and support for formation of a Tanzania Leasing Association.
TANZALEP is implementing its components and has already submitted a draft of a proposed leasing law, as well as tax recommendations to the government of the United Republic of Tanzania. TANZALEP is hopeful that all of these initiatives will encourage more banks, leasing companies and institutional investors to invest in and provide leasing services to enterprises in Tanzania
Q. 2. Will TANZALEP invest in leasing companies?
A . As mentioned above, TANZALEP is a two and half year Technical Assistance Project implemented under IFC’s Private Enterprise Partnership for Africa (PEP-Africa). PEP-Africa is a Technical Assistance model to implement IFC’s strategic priorities in Africa. It builds on IFC’s investment experience to identify constraints to private investment in Africa and help both governments and private sector address these constraints.
It is expected that once the investment climate for leasing is favorable, IFC Investment could consider investing in the Tanzanian leasing market through both equity and term loan financing in line with established IFC investment criteria.
Q. 3. How will TANZALEP assist Small and Medium Entrepreneurs access credit / lease assets (SMEs)?
A. TANZALEP will not provide credit or assets to SME’s, but will provide Technical Assistance through various capacity building activities such as training, business development and management information systems..
Q. 4. When the project is over, what will be the next step?
A. TANZALEP is providing technical and logistical support for formation of a Tanzania Leasing Association that will take up most of the Project work after project completion. Currently, TANZALEP has hosted two meetings for establishment of the Leasing Association and has assisted in drafting of the Association’s constitution.
Hence, once the project is over, TALA will continue oversee and supervise leasing activities county wide.
With leasing, you can spend your cash on other business activities such as salary payments if you have employees or any other functions, instead of using a huge amount of money at once when you purchase an equipment.
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IFC Private Enterprise Partnership for Africa