The company provides innovative solutions to help customers grow their businesses
When it comes to asset leasing, no one does it better than Vehicle and Equipment Leasing Limited (VAELL), an independent leasing and consulting company in the country as well as leasing market leader in east and central Africa.
Founded in 2006, the company has established itself as the leading expert in asset and plant lease acquisition and maintenance.
“We basically deal with operational leases,” says Mr. John Mogire, commercial manager at VAELL. Besides, the company deals with only long-term leases of between three to four years. To lease with VAELL, a business must be in operation for at least three years.
The firm prides itself as a leader in the leasing market, offering services to corporates and small and medium enterprises (SMEs) ranging from health, IT and telecommunications, banking, manufacturing, agriculture, construction, Government and regulatory bodies. This has positioned VAELL as a one stop shop where you can get any equipment you need at any given time.
In 2013, VAELL formed its subsidiary, Quipbank, a separate entity offering short –term tailor-made leases and rentals of agricultural equipment and machinery to farmers in different parts of the country.
Mr. Mogire says that the agricultural sector in Kenya is on a growth path. Quipbank was therefore launched to tap in that sector. The availability of machine rentals enables farmers, who lease out their land and do not have their own machines, to farm more productively.
Head office
Recently, VAELL moved its head office to Naivasha. “We felt the location is central, and with the emergence of Quipbank, it is easier to supply equipment on short-term basis.” Besides, most of the country’s farming and development is taking place in the rural areas.
Mr. Mogire also reveals that they are expecting over 480 vehicles back from lease this year, and storing them in Naivasha is quite cheap compared to Nairobi.
Headquartered in Kenya, VAELL’S presence felt in in six other African countries: Uganda, Tanzania, Rwanda, Burundi, Zambia, and Malawi. In addition, the company has ability to offer leasing services in over 20 other countries in the continent through off-shore structures.
With about twelve years of experience, VAELL has built a reputation of trading with integrity across the various markets where it operates.
Leasing solutions
The company offers a full suite of solutions in operational leases. “We lease all types of assets as long as they are movable,” offers the commercial manager. The wide range of solutions include vehicle, industrial equipment and machinery, computer and IT equipment, office furniture, medical, dental and veterinary and gym and fitness equipment.
VAELL was also the first company to lease vehicles to the government. “Our latest solutions have seen us become a leading provider of asset leasing acquisition solutions to governments in the region with a fully-fledged Government leasing Consulting Division.”
Clients have the freedom to choose from dry, partial or wet operating lease. In dry operating lease, the client rents the asset and bears all maintenance and service costs. In terms of partial lease, VAELL sources, procures and delivers the vehicles or equipment and bears all the insurance costs of the asset. The wet lease, according to Mr. Mogire, is preferred by most corporate clients, since the leaser bears all ownership risk and maintenance costs.
The firm has differentiated itself from other providers in the market by offering customized solutions to its clients. “We understand that each client has different needs. We therefore listen to our customers’ requirements and tailor make solutions for them to accommodate their needs,” notes Mr. Mogire.
Leasing benefits
When structured properly, a lease agreement may allow clients to receive tax benefits. The operating leases have tax incentives and do not result in assets or liabilities being recorded on the lessee’s books of accounts. Companies get 30 percent corporate tax benefits.
Leasing also allows companies to concentrate on their core business. “Corporates, SMEs and the government have ventured into leasing arrangements, which enables them to concentrate on their core business, cut business operational costs and increase efficiency in their daily operations.”
Furthermore, operating lease gives businesses an opportunity to improve their cash flow. Outright purchase ties up capital that could be used for other investment opportunities. Leasing is therefore considered beneficial since it frees company’s cash flows by doing away with the need to spend money by buying the required asset.
Strategic partnerships
VAELL has developed successful strategic partnerships with major auto dealers, financial institutions and suppliers both locally and internationally to help it meet the unlimited market demand. It has for instance partnered with PTA Bank, and in 2017, it received financing to the tune of $9 million worth of equipment in Tanzania.
The firm has been an Oikocredit partner since 2016. The worldwide cooperative and social investor is financing VAELL to support farmers with agricultural machinery and support services.
“We are currently working with other financial institutions to finance agriculture, since there is a lot of development in the sector,” notes Mr. Mogire. Most farmers have been trained and can now use equipment in their farms, which increases efficiency and reliability.
Mr. Mogire also says: “We have managed to change peoples’ mindsets from buying of assets to leasing.” Unlike multinational companies, most firms in Africa previously preferred buying of assets, and ended up tying most of their capital. Leasing has therefore started gaining popularity not only in Kenya, but across Africa.
There is a huge demand for construction equipment in 2018, which has for the first time surpassed that of motor vehicles. It is based on the fact that there is a boom in the construction sector in the country and most contractors have resulted to leasing, which they deem economical.
The current development is a growth from the downsizing experienced in 2016 after the capping of interest rates and the 2017 general elections. Considering most financial partners are risk averse, SMEs have little or no access to credit, which affects the leasing industry negatively.
QUIPBANK
As Quipbank we sell and rent top quality branded agricultural machinery across east Africa. We have no brand affiliation but we work with popular brands among them Volvo, John Deere so our clients can have up to date machinery at a competitive price.
Due to the rising demand for construction equipment with some of the equipment not available in the country, we import the equipment and lease them to local contractors.
Quipbank understands that new agricultural and construction equipment are very costly and opt to work with farmers and contractors to provide leasing options. Our leasing options include making partial monthly payments for a specified time frame while having the tools to get your job done.
We have working plan that suits your budget and needs we evaluate factors such as monthly or annual budget and your business needs. Some of the many benefits of renting equipment’s with Quipbank is that you are able to be deducted business expenses on your tax return.
Rent-to-own product
Plans are underway to launch the rent-to-own product. Mr. Mogire says that it will give customers a chance to lease an asset for a specific period of time and eventually own it. The monthly pre-payments will build up to the purchase consideration.
EABC (EAST AFRICAN BUSINESS COUNCIL) AWARDS
The EABC awarded VAELL as the best East African company in the service sector. We were up against Cv People Tanzania that was the first runners up and E.A tea traders that took the second place. We thank all our esteemed clients.
