Leasing & Asset Finance In Nigeria: Insights With Tayo Adekoya On Business Insights

Now we shift our attention to today's discussion. Joining me on the program is Adi Taio Adoya, an accomplished entrepreneur and the multiple award-winning CEO of Adept Less so Limited with over two decades of experience in finance listen and asset management. Caillou has positioned his company as one of the fastest growing asset finance firms in Lagos, earning industry accolades while driving solutions formemes and corporates alike. Many thanks for joining us on Business Insight on Plus TV Africa. >> It's my pleasure. >> All right, let's just talk about the big picture and the trends that moving the leasing and asset finance sector in Nigeria today. Can you walk us through them? >> All right. Um interestingly if um we put our fa on eye our mind on the enormous challenges in the economy >> um will lose base of the enormous opportunity that abound um I tell people in the midst of chaos abound opportunity and um leing is a creative way of funding of financing and um getting facility to do your business profitably. Instead of investing your capital that can actually be channeled to as a working capital, you can actually do a lease for your assets where you pay over a period of time and the opportunity enormous. Uh one of the interesting thing for us in this sector of the economy is unlike the conventional banking financial service provider um the SMAs are relegated to the background and those are the set of the people that play in our economy that we have chose to focus on because if you look at um data the SMAS is play a vital role. They employ manpower, they provide service, they provide products and they do a whole lot of things. You can't take them out of the >> economy equation basically. >> Okay. >> So that's why we focus our attention on them. >> Okay. So fine. So um what exactly have been your strategy in bridging financial um or financing gaps particularly for these SMMES that you have talked about because I know it's um it's not really so so common and um people are trying to really understand what leasing and the the the business is all like that but what strategies have you actually been able to bring to the picture? Okay, a strategy is to first educate people of uh what le is about >> and um to equally let them know that you don't necessarily need to go to the bank for your funding needs. >> Maybe you need maybe just break it down though listen for people who don't really understand. >> Okay. Um so when you hear less what comes to mind a whole lot of time it's um you are leasing a property >> but again that's one arm of leasing that is what we do it's called equipment lease >> okay >> whereby we provide finance for you to get equipment of choice where you spread the payment over a period of time >> so equipment of choice could be vehicle you need for your business. Um, for example, if you if you if you are setting up a bakery or you run a bakery, you need uh the oven. I mean, unfortunately, you have issues with our power. Uh, you need generator, you need the solar, you need lighting. I mean, we're in your studio, you need cameras to do to make this work. at the place list all kind of thing. Medical equipment, solar equipments, heavy duty, light duty generator, I mean all the like home home equipment, furniture for offices, for your homes. I mean just to make your life easy and to make running your business uh less of a border. >> Okay. So from what we understand um last year 2024 and the industry grew at um the rate of um 23%. You know one would have said that um the economic situation the macroeconomic situation is not really so so so wonderful. There were lots of um headwinds like inflation and currency volatility but then the sector was indeed able to thrive and um grew by 23%. Uh you know how was that managed really? >> Okay. Um a few minutes ago I said um leasing is a creative >> way of financing and um is an opportunity for you to acquire whatever assets you need to >> um if you permit mememes struggle to get a facility from the bank >> most of the times >> most of the times and the bank also felt that they are not a reliable sub sector They should they risky >> you know because they are highly risky because I mean they are small in size they run by individuals of questionable character >> and they also felt I mean if they granted loan if anything go wrong they they have next to nothing to hold on to >> but somehow we have been able to build a close knitted relationship with these people. Um most of our I mean most importantly our approach is we rely more on referral >> you know for example if I have dealt with you and you have proved to be someone of character >> there tendency the person your friend that you're going to introduce to us are likely going to be someone like you >> birds of a feather >> beds of the same feather they flock together so that's in a way make >> reviewing and assessing such person a bit of less of a burden on us. >> Okay. So, um the next question will be um uh what's the driving or what's driving the rise of non-bank lessers? You talked about banking and people not being able to access funds now. So, what's driving the rise of non-bank um lessers, you know, and um how do they compare to traditional banks? >> Okay. So, um you know you know for for bank there are enormous box to tick. Um for example um we also get some of our funding from banks >> okay >> and I know how tough it is to get those approval through but um with us we apply some level of flexibility >> we um get to know people by who they are and don't judge them by books because a whole lot of time books don't really determine the character of >> of an individual. So some of them don't even know how to keep the books. >> Yes. So we encourage our clients even those that don't keep book just like you said. We encourage them to get you don't need to get a a an accountant in your system. You can outsource that part of your business to a an accountant whereby they come in maybe monthly or weekly or so to check your book so that they can actually help you to put that guide. But that might not um be fancible for bank you know so they may not want to I mean because of that lapses they may not want to really >> be interested in your business you know so that flexibility make us to be able to >> you know accommodate these set of people and also help them grow their business because if they grow the economy grow I mean some small business I employ one or two persons I've actually take that kind of person off the job market. >> Okay. >> Basically, >> okay, now you've identified the issue of um funding and high cost of um specifically imported um assets as um you know very key pain points. But how do you strategize? How what's your firm and um the industry in general doing in innovating around these constraints? Okay, we have um um an association that most equipment leasing association belong I mean most company belongs to which is called equipment le of Nigeria. Um they do a whole lot of collaboration with um um vendors with um people that uh we buy equipment from and by so doing we have some level of leverage belonging to organization like ours Ellen you know and they help to connect the lesser >> to a vendor >> and we also enjoy some kind advantage of because I mean when we do this we do a whole lot of bulk purchase from these people. So that give us some leverage in terms of costing and get some level of discount to be able to also pass these benefits onto our client by extension. >> Okay. I I know you talked about um you know getting referrals and uh most of the times you deal with people who have um you've dealt with some way or the other but I know there are associated risks you know specifically when in terms of um financing leasing or even just cash back and everything you know but I want to find out what measures you specifically have been able to adopt to mitigate all of this risk like um you know payments defaults fraudulent lease practices and what would you one you know active players in the sector what would your advice for them be >> okay um I mean for every 12 there always be just that I mean you can't rule that out and if you run credit business as much as you try to tie all end all likely loose ends I mean that also be a challenge or the other but what we've done really is um I mean we do a whole lot of um KYC on these our clients M >> um we we t their repayment to we set up um a rem direct debits on their account >> and we also um use a glossi a global um >> okay >> whereby if um the particular account they give us um instruction on is not funded we can raise the dot money from another of their accounts. >> Okay. >> And um I mean our risk control person do um their what's it called credit check at interval >> pay visit to client to be sure they're not moving from where the addresses they've given to us >> where they're filling out form I mean all manner of things you know. >> Okay let's talk about some sort of a regulation and how effective they've been. I know there's um an equipment uh leasing act of 2015 and uh there's an EL uh roll out uh which has been in improving compliance and repossession processes but how effective have all of this been in your business. >> Okay. Yeah. Um it's been helpful in a way because um all um leing organization are expected to register which we are one of them >> and um we also expected to register all lees booked. So what that does for us is um once for example if I lease this to you >> and it's already register in their register you can't use this same assets >> to you can't use the same asset to get a lease elsewhere. >> Okay. >> So somewhere they help regulate >> the risk of um default. >> Okay. And they also help identify potential >> okay >> default or potential um clients that have questionable characters. >> So in a way they keep a register for all leases and all company. >> Okay. So that way it have issues issues of oblig limit and all that will be checked and >> yes absolutely. >> Okay. So so let's talk about that. That in itself is actually really wonderful. But do you really think that that it is enough or would you want further regulatory changes? Uh maybe you might want to recommend to strengthen you know maybe some issues in the listening. >> Is it whether you like it or not um even though the um it's it's um just came in um of recent. >> Yes. It's a ECU act is a law passed by our former president president Gul Jonathan when he was about leaving office. Okay. >> And interestingly I you can imagine since he left till now it is just of recent that Elra is coming to force but I mean we are not where we used to be. So we can always just hope and expect that more will be done in that regard. >> Okay. In your intro you talked about um how in your process uh you have been able to work with lots of young people and uh who have very wonderful dynamic you know mindset and when you talk of young people the place of technology actually comes to play. So how is technology helping um adapt less or streamline um their pro your processes and um enhancing client um experience? It's been fantastic really >> um one it has reduced um the paperwork to next to nothing. >> I mean you can be at the comfort of your home office and apply for a lease and our bank end staff get your documents review it get in touch with you if need be to make uh to find out if there is any uh clarification they need to make. And um uh first and foremost, it really helped us determine if it's a lease we want to or not because if something we don't want to touch, we don't want to waste our clients time. We let them know in good time and so that they can look for an alternate alternative option. >> Okay. So, so which sectors or assets classes do you see as the next big opportunities for listening in Niger? Um I mean um vehicles and uh commercial uh um uh vehicles uh motor vehicles and commercial vehicle have been the highest because uh you know for every for every organization movement is key >> and vehicle make it unfortunately for us in our country we don't have an effective and efficient uh public uh uh um transport yet. So you expect that most people that want to move from one point of the city to to the other still need to ride in their own vehicle and somehow >> an average person needs a vehicle that is comfortable >> and for you to get that you may need to spend some good million and you don't want to invest such money just on vehicle and >> your your business is suffering for it. >> Okay. So, so in terms of that since you've identified um transportation both commercial and private or even for you know the corporate you know so what um have you done or the maybe your sector done in that particular maybe in terms of jaw joining uh was uh the government on public private partnerships since you have identified that um people of business need to move from point A to point B >> we I mean there was a um retreat we did sometime I think two or three years ago about um government agency that talked about assembly of vehicles in Nigeria. >> Yeah. >> Which uh apart from it reducing the over cost of importation, >> it also provide employment, generate revenue for the country because if we produce vehicle, we may not even be able to consume all vehicles we buy. I mean it also give us opportunity to export to other to other countries to other countries. So it's a conversation that is ongoing. You know some of these things don't happen when >> you know we do the conversation but >> it's an ongoing conversation. >> So as we round off now uh so what would your advice be for that particular person who wants to get into the listen business and uh doesn't really know where to turn or just um feel that uh uh is it the right time is it the right sector with what's happening with the macro economy. What would your advice be? Uh that's on the one hand and secondly uh what's um the future in the next 5 years for the listeners as we round off. >> Okay. Um if you ask me in the midst of chaos >> there is great opportunities >> and that is where we are currently in our nation. >> Um um I mean I I travel so much in recent time >> and I see what's happening in the western world. People make it happened. So if we leave our nation thinking someone going to come here and fix it for us, we're joking. We need to come I mean to wait here make things happen for ourselves. >> Population is already an advantage to us. I mean the Chinese the western world they coming into this nation that means there is a lot of opportunity >> that abounds here. So we need to sit down work and get things done. There is enormous opportunity around there and if you want to get into the business my advice for you is to go for training at women and that's our umbrella body. >> All right well thank you so much um um T for your time appreciate it >> thank you all right T has indeed shared valuable insight on the state of leasing and asset finance in Nigeria. Clearly, the sector holds immense potential to drive business growth and economic development if the right policies, funding and innovations continue to align. That's all on today's edition of Business Insights. I am Justin Akadon. Many thanks for watching and see you again next time. [Music]