Case Study of DFCU Leasing Company - Uganda

This paper explores the role and scope of DFCU Leasing Company in the effective delivery of credit to small scale businesses. The company controls 85% of the lease market in Uganda. The author presents DFCU's leasing products and discusses the benefits of lease as a financing option:

• Helps in technology transfer;
• Improves production methods;
• Enhances efficiencies of SMEs.

The author discusses issues relating to sustainable operations of DFCU:

• Funding sources such as:
  • Debt;
  • Cash guarantees;
  • Bond issuance;
  • Factoring and securitization;
  • Grants.
• Efficiency issues such as:
  • Standardization and customization;
  • Responsiveness and branch network;
  • Cost management and procurement;
  • Lease monitoring, risk management and credit control.

The paper then presents some of the challenges to the leasing industry in Uganda, including the regulatory framework as well as the internal capacities within DFCU. Finally the paper concludes with the following recommendations :

• Fiscal incentives to attract lease financing;
• Enabling regulatory framework;
• Building business associations;
• Encouraging donor assistance.