BANK OF AFRICA-TANZANIA has launched to the market its competitive asset finance product “lease financing” that allows customer to acquire an asset without having to incur a large capital outlay. The facility offers a wide range of assets in a number of different industries like transport, mining, construction, information technology, oil and gas and tourism.
Commenting on this, The Bank’s Head of Enterprise Banking, Ms. Davikarani Williams said.” The bank has considered lease financing as an important product for companies ‘large and small’ to finance business operations while managing assets effectively and maximizing productivity and profits. The product provides an alternate source of credit that is specifically designed to accommodate acquisition of different assets be it trucks, tractors, machines, buses and cars. As leasing does not tie up large amounts of cash in equity, customer’s working capital and bank lines remain available for future expenditures and investments”.
Lease is an agreement allowing one party to use another’s property for a stated period of time in exchange for consideration. A lease agreement involves at least two parties: a lessor (Bank) who owns the property, and a lessee who uses the property. Lessee has the option to become owner of the financed Asset, or can return the asset to the Bank at the end of the leasing period. BANK OF AFRICA leasing involves a very simple but quick application and approval process. The lessee(customer) chooses the equipment/asset from a list of the lessors(Bank) recommended suppliers, and Lessor (Bank) purchases the asset selected by the lessee.
The lessee will be paying series of installments or rentals as agreed on the contract for the use of the asset while the Bank of Africa Tanzania remains the legal owner of the asset during the lease period. Speaking on this, the Bank’s Marketing Manager, Research and Development Mr. Muganyizi Bisheko said that product offers much more benefits than traditional asset financing methods, as it helps to maximize the cash flow of the company, flexible, assures the availability of quality asset and shifts the risk of technology obsolescence to bank. He urges companies to take advantage of the facility to maximize productivity and profits