Business

Micro Leasing: Therapy For Ailing Economy

Published

6 years ago

April 13, 2018

Micro Leasing, as the name connotes, is another form of leasing that involves little capital and equipment. It also involves the lessee, lessor and the vendor. With it, little capital is often required.
It could also be called a Small Scale Enterprises Leasing. One of the problems of small scale enterprises is their inability to attract capital.
The current trend is that, there is an attraction towards big ticket leases with focus on oil and gas industries, blue chip manufacturing companies and the telecommunication companies. Small scale enterprises are in a difficult situation especially in developing economies.
Financing problems constitute one of the bottlenecks encountered by the small and medium-scale enterprises in developing countries, including Nigeria.
Banks and most big lenders offer mainly short-term financing which is not suitable to small enterprises. To make matters worse, they demand collaterals for their loans and other forms of financing.
These problems have limited the access of small-scale enterprises to capital and other credit facilities. No doubt, robust economic development cannot be achieved without putting in place programmes that would create employment to reduce poverty among the populace especially the growing number of graduates.
Micro finance is about providing finance to the lower level of fund users, who are traditionally not served by the conventional lending institutions. These categories of fund users who constitute 75 per cent of the borrowing public, operate in the informal sector and therefore are at disadvantage when it comes to sourcing funds needed to operate their small business.
Government in the past had tried to address this imbalance when it floated the defunct small finance house like the Federal Saving Bank and the Peoples Bank, among others.
Unfortunately, these institutions could not address the need of this class borrowers due to potential interference in the affairs of the institutions.
To fill the funding gap, many micro finance institutions have come in form of local and foreign aided Non-Governmental Organisations (NGOs). Their number have increased significantly in recent times, due to persistent demand.
No doubt, the emergence of these institutions will stimulate lending to small enterprises, that are managedoperated mainly by the low income populace.
First, the rate of failure of small business is very high. It is also, a game of numbers becanuse the more they are, the greater the risk of default, hence leasing companies are distrubed by this problem facing micro leasing.
Secondly, visible leasing depends, to great extent, unlike other kinds of financing, on accurate appraisals of the markets for lessee’s products and services.
Lessee self assessment alone is inadequate particularly given the propensity of small enterprises-dominated trades to be swamped by excessive new entrants. Sound appraisal of small-scale business sectors requires specialised knowledge and skills and most financing institutions servicing the small enterprises market are not particularly familiar with these markets.
Successful leasing is based on the possibility of calculating and structuring lease installments, in such a way that the fair market value of the lease asset remains at time above the amount the lessee would need to pay in order to purchase the asset from the lessor.
This calls for high level of skill and knowledge about the equipment. Thirdly, administering large numbers of small value contracts generates high overheads, monitoring business performance in order to anticipate and preempt repayment problems which can prove costly, depending on the management information systems in place.
Fourthly, for security reasons and effectiveness, lessors prefer to lease items that are easy to move.
This, unfortunately also makes assets more prone to threft or absconding by the lessee. In practice, lessors need additional forms of guarantee for contacts with small enterprises.
Moreso, the market research capacity of most enterprises is limited.
Therefore, when they want to invest in new equipment they are often not fully aware of the full costs, sales volumes and market available.
Since the leasing company also has an interest in seeing the leased assets used to their full capacity, research into the markets for the leased equipment should not be left to the small enterprises alone, and the fact remains that most of the leasing companies are really for this kind of research for small ticket leases.
Finally, most of the small scale enterprises are untested. They do not have enough resources to pay for the services of professionals, and for this reason, leasing firms are always willing to deal with a well structured organisation with good records keeping and credits history.

Bethel Toby

Business

Fuel Scarcity: IPMAN threatens shutdown over bridging claims

Published

5 days ago

May 3, 2024

The Tide

The Independent Petroleum Marketers Association of Nigeria (IPMAN) Depot Chairmen Forum, has exonerated its members from the current fuel scarcity in the country.

According to IPMAN, this is caused by its inability to source petroleum products.

The IPMAN Depot Chairmen Forum also threatened to withdraw its services over non-payment of N200 billion bridging claims by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to its members, since 2022.

Alhaji Yahaya Alhassan, the Chairman, of the Forum said this while briefing newsmen in Abuja, yesterday.

Alhassan said the Nigerian National Petroleum Company Limited (NNPC Ltd.) was the sole importer of the product, but the marketers could not source products from NNPC Ltd. deport, rather from the private depots at high rate.

“We cannot buy fuel from the private depots at N950 and transport the product from Lagos to the North and other parts of the country with N2 million and still sell it at N900 or N1, 000.

“It is expedient for us to state that we are more pained by the non-availability of petroleum products in the country, which has given rise to another round of untold hardship for Nigerians.

“Contrary to claims that IPMAN members are hoarding Premium Motor Spirit (PMS) known as fuel, we would like to categorically state that PMS scarcity is wholly triggered by inability to get fuel from NNPC and not IPMAN,’’ he said.

Meanwhile, the NNPC Ltd. Chief Corporate Communications Officer, Olufemi Soneye said the disruption was due to logistical issues which had since been resolved.

“We currently have an availability of products exceeding 1.5 billion litres, which can last for at least 30 days. Unfortunately, we experienced a three-day disruption in distribution due to logistical issues, which has since been resolved.

“However, as you know, overcoming such disruptions typically requires double the amount of time to return to normal operations.

“Some folks are taking advantage of this situation to maximise profits. Thankfully, product scarcity has been minimal lately, but these folks might be exploiting the situation for unwarranted gain,’’ Soneye said.

He however, said the lines would clear out soon.

On the non-payment of bridging claims, the IPMAN forum said it was distressed and depressed by the laidback attitude of the NMDPRA towards the survival its member’s businesses, arising from its refusal in paying the claims.

“It is with deep frustration that we have assembled here today as the IPMAN Depot Chairmen Forum. It is also disheartening to note that some of our members have completely shut down businesses and retrenched employees.

“As businessmen and women, our members acquired bank loans to keep their fuel retail outlets running on a daily basis across the nooks and crannies of Nigeria in order to serve the teeming population of Nigerians,’’ Alhassan said.

He recalled that Sen. Heineken Lokpobiri, Minister of State Petroleum Resources (Oil), at a stakeholders meeting in February mandated the NMDPRA management to clear the entire debt in 40 days.

“However, today, we have crossed the 40 days’ time lapse given to the NMDPRA to clear the debt, and it is shameful to state that only the paltry sum of N13 billion has been paid, ignoring minister’s directive.

“We are not happy with the indiscriminate increment in the issuance and renewal of Sales and Storage Licence, by the NMDPRA, and the subsequent delays in acquiring the licence, which our members are recently subjected to.

“We are also calling on President Bola Tinubu to look into this unwholesome figure which is highly detrimental to our business and reverse it forthwith, as it is bound to impact negatively on the masses.

“We are poised to take far reaching decisions that may cripple the supply and sales of petroleum products across Nigeria if our demands are not met within the shortest period of time.

“We are collectively prepared to withdraw our services, shut down every single outlet, and suspend lifting of products forthwith till our demands are fully met, and the consequences will be terrible.

“We call on our members to however remain resolute and law abiding, even as we draw close to the immediate ultimatum for our demands to be met by the NMDPRA,’’ the chairman said.

Reacting to the IPMAN’s claims, the Acting Head, Corporate Communications, NMDPRA, Seiyefa Osanebi said the bridging claims payment was ongoing.

“The bridging claims payment is always an ongoing process,” she said.

Maritime

Shippers’ Council Registers 160 Port Operators

Published

1 week ago

April 29, 2024

The Tide

The Nigerian Shippers Council (NSC) says it has registered 160 Port stakeholders into its Regulated Port Service Provider and Users platform since the initiative began in 2023.
Executive Secretary, NSC, Mr Pius Akutah, made the disclosure on the sideline of a sensitisation programme by the commission for port operators in Lagos, with the theme, “Regulated Port Service Provider and Users”.
Represented by the Director, Consumer Affairs, Chief Cajetan Agu, Akutah emphasised the significance of the programme for stakeholders.
He said the sensitisation programme was the second edition after its commencement during the last quarter of 2023.
The Secretary said the 160 registered port operators consist of agencies, terminal operators, shipping companies, individual port users as well as service providers.
“We invited the ports stakeholders for enlightening them on the processes for online registration of Regulated Port Service Provider and Users.
“We have demonstrated to them how to register and how to make payment and we were able to present before them the various categories of the registration.
“The rate of payment is also in the registration. The payment of each group depends on the operation. A shipper pays N30,000, terminal operators and shipping companies pay N300,000, truckers also pay N30,000, while some pay N50,000 and N100,000.
“The Council was able to intimate them on the benefits, because port users benefit more as we help to interface on reducing port charges from time to time”, Akutah said.
He said that there was a need to continue to work with port operators to stop delays and eliminate high costs to make the port efficient.
Also speaking, the Deputy Director, Stakeholders, Service, NSC, Mr Celestine Akujobi, said “the sensitisation exercise was important for the council to enable us bring all the port stakeholders together”.
According to him, this is to avoid challenges during the implementation of the council’s responsibilities.
“By the time we introduce sanctions on defaulters, no operators will complain that he or she is not aware of the registration.
“I’m happy with the turnout of this sensitisation. This shows that the operators are well informed of the statutory friction of the council as the port regulator.
“The final implementation will commence as soon as we discover that all the operators have keyed into the portal.
“We are engaging other ports across the country and we’re hopeful that before the last quater of 2024, the council will implement sanctions on defaulting operators”, Akujobi said.
Earlier, Vice Chairman, National Association of Government Approved Freight Forwards (NAGAFF), Dr Ifeanyi Emoh, said port challenges were enormous, adding that they originated from some of the government agencies.

Emoh urged the council to look into regulating other government agencies, so that there could be a window through which they can collect port charges collectively instead of indiscriminately.

By: Chinedu Wosu