A winding path of career shifts has punctuated the life of Ant**ny Kibe, w** has climbed the h***s of Silicon Valley, navigated the contours of consultancy and now finds himself in ***et financing.
The Chair of the Leasing ***ociation of Kenya (LAK) describes himself as an avid reader, and books would certainly need to be written on the exuding p***ion that oozes whenever he talks about leasing.
The University of California graduate w** ranks Peter Drucker’s Managing People, Sun Tzu’s Art of *** and the Bible among his top reads, says leasing is one of the most efficient, yet highly untap*** ways to grow an economy.
But what is leasing?
Leasing is a mode of ***et finance where one party, called the lessor, enters a contractual agreement so that a lesee is given access and use of property or equipment owned by the lessor. The agreement determines the obligations and liabilities that fall on each party, such as regular payments made to the lessor (e.g. rent).
Basically put, the lessor is the person offering the property or equipment while the lessee is the user of the property or equipment.
In leasing, the lesee is not necessarily looking to own the ***et in the end, only ‘renting’ from the lessor for a period of time and as an ***et finance mechanism differs from hire purchase, where the end goal is for the ***et to transfer in ownership from one party to the other.
Prior to the start of the year, leases were categorised as operating leases and finance leases, or ‘wet’ leases and ‘dry’ leases respectively, Mr. Kibe says.
“A wet lease has the full package; maintenance, insurance, perhaps tracking services. Basically, value additions depending on the nature of the ***et. A dry lease meanwhile is purely finance with maybe a few value addition,” he says.
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**wever, changes in the International Financial Reporting Standards (IFRS) now render leases practically wet leases, with one major change requiring all leases to be recorded on the balance sheet of the book of accounts. Mr. Kibe explains that before this, dry leases were usually off balance sheet ***ets, which sometimes meant accountants became “creative.”
“The main reason for this change was factors such as the financial cr**** of 2008, where accountants became creative with off balance sheets transactions. The Airline industry was very notorious for this as airlines don’t own planes — they are leased. So as an investor, you probably didn’t know what ***ets weren’t on the balance sheet.”
The change therefore reflects what Ant**ny Kibe describes as a need for investors to seek more transparency.
Leasing ***ociation of Kenya (LAK)
In 2003, an umbrella ***ociation of ***et finance and leasing prac***ioners was registered in Kenya. Originally under the name East, Central & Southern Africa Leasing ***ociation, the group changed its name in 2007 to Leasing ***ociation of Kenya (LAK) so as to better reflect its membership.
Ant**ny Kibe is currently the LAK Chair and has been at the helm for the past two years. His journey t**ugh to the apex of Kenya’s umbrella leasing group was **wever not straightfor***d.
Having stud*** for his undergraduate in the USA at the University of California, Mr Kibe ventured into the medical device pharmaceutical industry at Silicon Valley for around seven years.
“Silicon Valley is known predominantly for its soft***e and computers, the Apples and the Facebooks. But there are other tech sectors that are big,” he says.
From product developement to manufact****g, the rugby fan found himself in regulatory compliance and quality ***urance and it is “through that, that’s **w I ended up getting a Masters in Quality ***urance” from the San Jose University.
Ready for a change and with relocation to Kenya on his mind, Ant**ny Kibe returned to the country in 2004 where according to him, he experienced a complete career shift, moving from tech to consulting at PriceWater**use Coopers.
Four years later, Kibe joined Simba Corp where he ended up in ***et finance, which with a academic background in finance wasn;t totally new but “as an industry experience t**ugh, it was totally new for me.”
As Simba was a member of LAK, Kibe says he appl*** himself into the umbrella group, joining the board and eventually was elected Chair two and a half years ago.
“When you think of ***et finance, where do you really go to study ***t finance?”
LAK Chair Ant**ny Kibe on the reason why the ***ociation provides capacity building for its members.
The autobiographies lover says the mandate of LAK which began as advocacy and lobbying, has recently shifted gears to include capacity building and engagement with fellow stake**lders as well as government in the bid to in***ence policy.
LAK is made up of banks, non-bank financiers, equipment ******s and service providers and currently has a membership of 44.
Mechanisation for efficient farming in Kenya
The LAK Chair sits on a taskforce commisioned by the Ministry of Agriculture to look at modalities of increasing the mechanization of agriculture from the current 22% to 35% by 2025.
Priority sectors include dairy, fisheries, grain storage and irrigation. and the task force, w**’s mandate ends in March 2019, is exploring **w to help improve access to financing for far**** to mechanize.
Ant**ny Kibe says many far**** in the country do not have access to equipment, making it inefficient especially when one considers that nei***o****g countries such as Uganda and Tanzania are producing lots of food. In fact, it is even at times cheaper to buy and transport food from Kenya’s nei***ours than it is getting produce directly from our farms.
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The taskforce, Kibe says, is looking into **w this can be remed*** and one of the resolutions could see an ***ociation set up to provide easier access to equipment by far****.
“We have agreed in principle that going for***d, we need to set up an Agricultural Equipment ******s ***ociation.”
Kibe says that the taskforce is also looking into accessing a Ksh10 b***ion letter of credit signed between Kenya and the government of India. Initially meant for trucks, the credit facility w*** be available through financiers — banks and non-banks — that are financing the far****.
29% – agriculture’s contribution to Kenya’s GDP
75% – small scale far**** output
70% – employment, majority in rural areas
Whereas trucks are the priority for this line of credit, Kibe says other equipment such as milking equipment, fisheries equipment w*** also be considered. “Basically, it is what type of agriculture is a farmer doing and what do they need.”
Kibe also says that the aim w*** be to see **w far**** can be aggregated so that far**** from one area can acquire equipment from one aggregator. This is because land**lds for the largely small scale far**** in the country are small compared to the size and expense that could cause a burden to an individual farmer.
“We w*** thus be leasing the equipment to the aggregator w** w*** provide a service to the farmer as and when the farmer requires,” Kibe says.
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