By Times of Zambia, Friday, November 21, 2003

THE Bank of Zambia (BoZ) says it is impressed with the performance of the leasing sector in Zambia.

BoZ governor Caleb Fundanga said this at the closure of the three- day African Leasing Convention training held at the Intercontinental Hotel in Lusaka.

Dr Fundanga said the leasing sub-sector which was the largest segment of the non-bank financial institutions sector, had total assets amounting to K196 billion at the end of September 2003.

He said that the total lending (leases and loans) by the leasing companies amounted to K142 billion which was just under 10 percent of the commercial banks' lending. “ This goes to show that the potential for growth of the leasing sector is immense ,” he said.

Dr Fundanga, however, said almost all the leases written by leasing companies in Zambia were finance leases, rather than operating leases.

He appealed to the Zambia Leasing Association to impress upon their members to quickly diversify fully into operating leases. “For our part as regulators and supervisors, we look at the leasing sector as one that should act as an avenue for broadening the range of asset-based products in order to offer clients a wider choice of asset financing solutions,” the BoZ chief said.

Dr Funganda said leasing had been successful internationally in generating significant levels of capital investment.

It provided a service to the business community that complemented the services that had traditionally been offered by banks.

He added that global trends indicated that the product could be used to empower the private sector by giving them access to much-needed capital equipment.