Leasing In Nigeria
He is a seasoned professional with wealth of knowledge and technical know-how. His vast experience and exceptional track record of growing businesses and delivering transformation has positioned him as a leader and prudent manager of resources.
In an exclusive chat with Francis Adejoro the Publisher of Classy Executive, Christian gave insights on what it takes to stay in a winning position during COVID-19
What Mechanism Are You Putting In Place To Mitigate The Risk Of Defaults In Rentals Due To Covid-19 Pandemic?
Basically Coscharis Mobility Limited is a leasing company involved in short and long term leasing, we are also into haulage , staff outsourcing and driving academy business. Our income stream is made up of 80% of long term leasing and 20% short term leasing. All our long term leases are still working with multi-national companies and therefore, very much active notwithstanding the pandemic, our revenue keeps coming. The other 20% , that is the short term leases is connected to hotels, Airport and some other places, these are the areas affected by the pandemic. In terms of default, some clients actually returned their vehicle as a result of the pandemic; they did this by applying force majeure which is an acceptable condition in a pandemic situation. We are coming up with products on alternative ways the returned vehicles will be used.
2018 ELAN Statistics that the manufacturing sector accounts for only 12% of total lease volume. Why is this so?
If you look at the portfolio of leases in Nigeria, The sector that leads the table is oil and gas where companies like C & I leasing are playing. This is because of the level of high duty equipments mostly used by this sector. This oil and gas sector is closely followed by transportation sector. The reason why the lease volume in manufacturing sector is low is because most manufacturing companies prefer to buy their equipment outright ,besides this they have access to financing from foreign companies like chrome and some other ones. They hardly lease their equipment . We are willing to offer manufacturing companies leasing services whenever they need our services.The highest demand so far is the oil and gas industry followed by transportation and telecommunication. We have lease transaction with a good number of manufacturing companies on vehicle and haulage.
Accessing the nation’s leasing industry environment vis-à-vis what obtains in other climes in terms of policy measures, what would you say the Nigeria government should do to make the environment more supportive to leasing business
The industry needs to be regulated, the leasing act is on but the regulating arm of it has not really been effective. Regulation will help to track the numbers of leases we are having as the current volume may not be accurate. Regulation will promote accountability, efficiency and control. Government needs to ensure that the regulation of leasing industry starts as fast as possible. Government also needs to minimize fraud in the system by making leasing of assets compulsory in certain conditions. In some other countries like America, you are not allowed to spend billions in acquiring equipment without requesting for a lease, one of the ways government can control fraud in Nigeria is to discourage outright purchase of assets. The leasing act has been signed already, once the regulatory aspect is signed everything on leasing will fall in place.
What advantage does leasing of asset has over outright purchase?
In operating lease, you do not need to tie down capital for instance “I have five million naira to buy a car instead of buying the car with my five million naira I can lease a car that will in return be paying my rentals while I invest the five million naira in some other businesses that will yield profit. In operating lease the lessor maintains the equipment be it vehicle or equipment , the lessor takes the responsibility of maintaining the asset. One of the major advantage of this is that it allows you to concentrate on your core business. Leasing reduces your tax burdens and gives you off balance sheet financing.
Investigations shows that there is a surge in operating lease, why is this so?
The surge in operating lease is as a result of after lease maintenance. Most multi- national companies do not want to be involved in the maintenance, fueling of vehicles and the sourcing for drivers. What they want is never to experience down time in their operations. Vehicles must be available for their use at all times and this is majorly because of the kind of environment we operate from as the roads are bad. This companies do not want anything that will affect their operations as a result they choose operating lease where they could have access to 24hrs services without maintenance, fueling, drivers and vehicle documents renewal worries. The surge in operating lease is as a result of all these benefits as it gives them value for their money.
The Banks are seen as lead players especially in financing big ticket leases. Why is this so?
There are three parties involved in a lease transaction. The lessor, lessee and the vendor who supplies the equipment financed by the lessor. Leasing cannot materialize without a bank being involved in the funding. The Banks plays a vital role in lease financing, they are key players in leasing sector.
With the current COVID-19 situation, what advice do you have for your colleagues?
This is the time to be very close to your client, I am in touch with my client on monthly basis. I sent letters to the managing directors of this companies because I know we are in these together. These is the time to come closer to your clients in other to know how they are faring. This will enable you know areas you will be of assistance, because after pandemic we are still going to continue in business, you also need to be creative in this period. You must think of the best way to put your returned assets into use. This is also the time to maintain a good relationship with your banks.
Do you see any opportunity in COVID-19 ?
It has made us to do things that ordinarily we would not have attempted doing, there is going to be a surge in post covid-19 asset leasing, a surge that can help to recover all the lost revenue. It is time to be more creative and be prepared to handle post covid-19 requests.
Who is your mentor in leasing industry?
Pastor Emeka Andu, he was the Managing Director of C&I Leasing and currently the Vice Chairman of C&I leasing, he is a man I will never forget in my life; he is my mentor and also like a father to me.
Do you have any plans of going into politics in future?
No! I want to live a simple and fulfilled life.
How do you relax?
I relax with my family, I do exercise every day. I also do not joke with my family, my son plays a piano, my second son plays a guitar, whenever they are playing and singing for me, it makes me happy and relaxed.
When you retired, how do you want to be remembered?
I have been in this industry for about 18years, when I see the records of success of those that have worked under me one way or the other now working in other big organizations as operation managers or leasing officers, it makes me happy. I feel fulfilled by the mention of my names by these people for the good I have done.
I have trained so many people, I also trained in ELAN a couple times. I have also trained outside the country like UK, Turkey and some other places. I am not perfect, but I know for sure that I am an epitome of integrity, I will be remembered for my integrity and stand on issues that reshapes businesses and humanity.
Thank you for sharing your time with me sir.
It’s my pleasure, I appreciate.