Kigali: The International Finance Corporation (IFC) reports that the leasing sector in the country has turned into a multi-million dollar business – expanding up to ten times compared to when it was started in 2006, RNA reports.

The World Bank’s private sector lending arm said Tuesday as it announced a record investment volume in Sub-Saharan Africa for its 2010 fiscal year, that the success of the leasing business was testimony of only good news.

The sector has been transformed from what the IFC called “modest beginnings” at a mere $3million in 2006, to one worth more than $30 million today. 

Leasing was introduced in Rwanda is 2006 with only two commercial banks; Fina Bank and Commercial Bank of Rwanda (BCR). Currently five banks and two microfinance institutions offer leasing while two companies supply equipment for leasing.

Last week, the Rwanda Leasing Association headed by BCR formally took over from the IFC which closed its leasing programme in Rwanda.

BCR managing director Mr. Anand Sanjeev said at a function that the transport sector, education, trade and commerce, mining, construction, agriculture and many other sectors have driven the growth of leasing.

The transport sector alone accounts for 64.14% of the leasing deals compiled, said Sanjeev. Experts however say penetration is still very low at 2%, an indication that there is potential for growth.

The BCR boss also revealed that most of the leasing financing had been concentrated in Kigali with up to with 90% - suggesting just 10% is distributed across the country.

Over 42% of the leases are below $50,000 while micro leases as small as $180 have been seen in the microfinance institutions. Despite the fact that the leasing market is growing fast, the leasing industry continues to face legal and regulatory challenges, Sanjeev said.

Announcing the record investments on the African continent, the IFC said during the fiscal year that ended in June 2010, it increased investments in Sub-Saharan Africa to $2.4 billion for its own account from $1.8 billion a year earlier. 

It was the first time IFC's annual investments surpassed $2.0 billion in the region.