Laying the groundwork for more leasing in the DRC
ELAN and IFC jointly organized a workshop from 11th to 12th of March with representatives from the Ministry of Finance and Central Bank of Congo. The purpose of the workshop was to address fiscal and regulatory challenges preventing leasing being widely offered as a common means of financing in DRC.
The Central Bank briefed participants on the revision of three regulations they put into effect at the end of last year to boost leasing. The rest of the workshop covered tax related topics such as VAT, deduction of depreciation of leased assets from corporate tax, import tariffs on leased equipment and registration fees for leased equipment.
At the end of the workshop, participants produced a draft amendment to the leasing law. The draft was shared with the Governor of the Central Bank so he can kick-start the revision process of the law.
Broader use of leasing in DRC is expected to have a major positive impact on the development of SMEs as they currently lack high-quality collateral to access funding from banks. Leasing addresses this access to finance constraint by enabling SMEs to use the leased assets as collateral.