Addis Ababa, April 24t, 2020 (FBC) – EthioLease, the first foreign-owned leasing company, received 44 tractors as part of a collaborative Memorandum of Understanding (MoU) the company signed in February 2020 with the Ministry of Agriculture and the Agricultural Transformation Agency (ATA).
The agriculture equipment will equip ATA farmers’ mechanisation centres which provide services to clusters of smallholder farmers who cannot afford or do not wish to buy equipment, said the company in a statement.
These tractors are part of the first batch of equipment, in addition to the 13 tractors already handed over to lessees and are a continuation of the company’s commitment to the country’s agricultural mechanization transformation endeavour.
The collaborative agreement has the potential to reach over 60 centres in the next three years with EthioLease providing over 150 million dollars’ worth of agriculture equipment.
Speaking on the latest delivery of equipment, EthioLease Board Chairman Girma Wake said “the arrival of these additional tractors will contribute to utilizing the country’s immense potential for agriculture mechanization through leased equipment.”
He added, “This kind of support will maximize the efficiency of labor and enhance the farmers productivity.”
EthioLease is a subsidiary of Africa Asset Finance Company Inc. (AAFC). It began operations in August after receiving a licence from the National Bank of Ethiopia.
It was formed to address the equipment and forex shortages in Ethiopia by providing capital goods financing and a wide range of leasing services for multiple sectors such as agriculture, healthcare, energy, food processing (coffee processing), and manufacturing, among other verticals.
Commenting on the significance of leasing services for Ethiopia’s agriculture sector in particular, EthioLease CEO Girum Tsegaye noted that “financial services are a critical enabler for sustainable economic growth which will increase productivity among farmers to ensure poverty reduction and food security as well as significant financial gains.”
EthioLease buys and imports equipment and oversees its maintenance and proper use throughout the lease period. Typically, the lessee will have an option to buy the equipment from the company at the end of the lease period.
Since its launch, EthioLease has provided leasing services to address equipment shortages in the agriculture, healthcare, energy, and food processing sectors, including some in manufacturing. To date, EthioLease has signed leasing agreements with more than 60 customers.