Instead of monetary credit, microleasing represents a whole new and innovative approach through which productive assets are made available. Using the leased asset itself as collateral (such as a cow, water pump or chainsaw), smallholder farmers have the ability to procure productive assets without incurring debts beforehand. The risks for beneficiaries are also minimized: existing property and credit histories play no role. The basis for providing a lease is the expected future harvest. Microleasing means leasing and procuring productive assets to improve employment possibilities for low-income individuals. To support economic development, Swisscontact promotes the concept of microleasing for smallholder farmers to be able to purchase production inputs.
Microleasing at Swisscontact started when Credit Suisse was celebrating their 125th anniversary in 2006 and had allocated funds to support Microfinance. Swisscontact submitted a concept note and the Financial Services East Africa project delivered the initial Microleasing concept note.
When Credit Suisse contracted the Swisscontact Financial Services Project East Africa in 2011, it soon became clear that upscaling Microleasing in Uganda, Tanzania and Rwanda could not be conducted as it had in Kenya – by supporting the establishment of start ups. This would unnecessarily prolong the time to market and tie Microleasing to a single supplier.
Haron Muchiri says he cannot imagine a life without Microleasing products since they have transformed his life tremendously. He prides himself in being self-employed and confesses that despite not being highly educated like his father who is an engineer by profession and his siblings, he is happy that he is still able to be self-reliant, provide a comfortable life for his family and provide employment to his fellow youth hence playing his part in building the nation.