Equipment leasing in the Nigerian banking environment: a legal perspective

There is today a great variety of economic ventures in Nigeria needing huge capital resources for their development. These ventures usually require very expensive equip­ment which financially cannot easily be acquired by people who need it. Even where they can afford to do so they generally would not like to purchase it as doing so would not only tie down their capital but also saddle them with equipment they probably only require to carry out a specific project. But since the businessman or industrialist must use the equipment for the execution of his business, an alternative source of financing has to be found, and equipment leasing has been found to be the most attractive.

Even though equipment leasing was introduced in Nigeria only in the early 1960’s, it has grown into a multi-billion naira business in less than three decades and has generated a special interest in the Nigerian banking institutions, among others. Despite the huge scope and size of the industry, it is unfortunate to note that this commercial activity is very much misunderstood by the general public and the operators, and worse still there is no adequate and / or specific legislative structure governing it. The effect of this is that the industry is developing in very many directions.

This thesis therefore attempts to examine fully the legal perspective of this mode of financing within the Nigerian banking environment, with a view to stream-lining the operations or providing some sense of direction in this highly lucrative and vibrant commercial activity.