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         PROJECTACTIVITIES TODATE


( 1) MARKET STUDY


Between April and July, 2005, the TANZALEP
Project Team conducted a study of the leasing market
in Tanzania. As part of that study, the Team met and
held discussions with a number of stakeholders,
including the government, micro finance, banking,
and professional services sectors, as well         as,
individual experts on leasing. The aim of the study
was to profile the leasing industry in Tanzania, to
understandthe current leasing portfolio and to grasp
the issues affecting growth of the industry. During
this period, the team also received written statements
on leasing issuesfrom stakeholders.


Developing leasing in Tanzania is an initiative by the
Government of Tanzania, in collaboration with the
International    Finance    Corporation     and    the
Government of Switzerland, to empower Tanzanians
to actively participate in the economy and was
mentioned in the 2005/2006 budget speechdelivered
to Parliament on 8thJune2004.


(2)MARKET REPORT

The market study culminated in a published report:
"Leasing in the United Republic of Tanzania: A
Snapshot of the Leasing Market in Tanzania, July,
2005'. The report was officially launched on August
17th2005, at a stakeholders' conference on leasing,
andcirculated before-handto stakeholders.

The marketreportidentifiesthree majorobstaclesto
thegrowthof leasing:

   1.   Inadequateleasing legal framework, including
        hurdles to enforcement of lease contracts and
        repossessionof leasedassets;
  11.   Inadequate tax incentives for leasing, and
        unfavorable   Value    Added     Tax    (V AT)

                                                                        treatmentonfinanceleases;and
                        INSIDE

                                                                 Ill.   Lackof public educationonleasing.
     .:. ABOUT THEPROJECT& DONORS
     .:. WHYDEVELOPFINANCL4L                                    (3)LEASING ROUND TABLE DISCUSSIONS
         LEASING?
     .:. RECENTLEASINGNEWSIN THE                                Between August 9th to 11th,2005, the Project Team
         .MARKET                                                held round table discussionswith leasing stakeholders
    .:. PROJECTACTIVITIESTODATE                                 at the World Bank Country office in Dar es salaam,
     .:. KEY ISSUESARISINGFROM                                  Tanzania. Commercial banks, equipment & motor
         PROJECTACTIVITIESTODATE                                vehicle suppliers, the Tanzania Revenue Authority,
     .:. CURRENTACTIVITIES                                      the   Capital   Markets   &    Securities  Authority,
    .:. CONTACTS                                                professional service firms, and representatives of
                                                                professional bodies, among other stakeholders, were
                                                                represented at the roundtables. Various issues
                                                                including tax, legal and accounting issues in leasing
                                                                were discussed.
   ABOUT THE PROJECT & DONORS

                                                                (4)LEASING CONFERENCE
TANZALEP was officially launched onthe 24th
May, 2005. The project is being implemented                     As follow-on to the leasing roundtables, IFC hosted a I
by IFC as a Technical Assistance project,                       half -day leasing conference on 17thAugust, 2005, at
made possible with the generous support of the                  the Movenpick Royal Palm Hotel in Dar es salaam.
Swiss governments' Centre for sustainable                       Presentations on IFC investments and technical
economic development -seco                          (www.seco-  assistance activities in leasing were made at the
coooerationn.ch). (seco is the state secretariatfor             conference by senior IFC staff, including Ms. Rachel
   economic affairs)                                            Freeman,IFC -PEP Africa Deputy General Manager,
                                                                and a renowned intemationalleasing expert, Mr. Fritz
            Supported by Switzerland                            Peter, the Honorary Chairman of Lease Europe.
               unafadhiliwa na Uswisi
                                                                Stakeholders continued the discussion on leasing
            I
                 I '...'n."   '.. ru.W"'"ho'.                   issues in the country after the conference and
                   ~:~~:-:~'~~'.,~;'.;:~"~E,:~;;~~,
              seco                                              thereafter.


                                                                     KEY ISSUESARISING FROMPROJECT
The aim of the projectis to promotefavorable
                                                                               ACTIVITIES TODATE
legal and economic conditions for financial
leasingto developin Tanzania,andto thereby
improve financing options for small and                         The project has identified obstacles to leasing
medium-sizedbusinessesinthecountry.                             development in Tanzania. Some of the issues
                                                                identified anddiscussedunderthe Project's ongoing
Themainactivitiesof theprojectareasfollows:                     work,include:

     .:. Legislative Review- The projectwill                          i.   Leasing legal framework -Inadequate
          examinecurrentandproposedleasing                                 leasing legal framework, and whether a
          legislationto identify inconsistencies                           leasing law will promote growth of
          andrecommendappropriateaction.                                   leasing.



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