Leasing Potential for Smes in Tanzania: Experience from Lessors and Lessees

Abstract

Lease finance has been referred to as one of the best alternative sources of long-term finance for Small and Medium Enterprises (SMEs). There is a lack of literature on the engagement of both lessors and lessees in relation to lease finance in Tanzania.  The researchers employed seven case studies consisting of two lessors and five lessees, in order to present the current experience and perspectives of the leasing business in Tanzania. The findings suggest that the lease finance has potential in Tanzania based on the needs of SMEs. Good clientele, good suppliers and the availability of credit in a good regulatory environment are important for lessors. Commitment to the business, quality of suppliers, good tracking of cash flows and the availability of markets are important for SMEs which seek lease finance.