Performance, Challenges, and Prospects of the Lease Finance Sector in Ethiopia: the Case of Addis Capital Goods Finance Company, Oromia Capital Goods Finance Company, and Debub Capital Goods Finance Company
| dc.contributor.advisor | Temesgen Worku (PhD) | |
| dc.contributor.author | Temesgen Menza | |
| dc.date.accessioned | 2025-08-06T12:18:44Z | |
| dc.date.available | 2025-08-06T12:18:44Z | |
| dc.date.issued | 2025-06-22 | |
| dc.description.abstract | The lease finance sector plays a critical role in fostering economic development by providing financing for businesses, particularly in emerging markets like Ethiopia. Hence, the primary purpose of this study, titled Performance, Challenges, and Prospects of the Lease Finance Sector in Ethiopia: The Case of ACGFC, OCGFC, and DCGFC, is to evaluate the financial performance of three prominent capital finance companies while identifying the prevailing challenges and outlining future growth opportunities in the sector. This study employs a mixed-methods approach, employing both qualitative and quantitative data collection methods. Research design was descriptive. A combination of random and purposive sampling methods was employed to select respondents from the study population. The instruments were a questionnaire, interview and an Annual Audited data review. The data gathered was analyzed using descriptive statistics, which included tables, charts, frequency distributions, and percentages. A total of 76 questionnaires were analyzed alongside financial performance metrics from 2016 to 2023. Key financial ratios, Return on Assets (ROA) and Return on Equity (ROE), were utilized to assess the companies' profitability and operational efficiency. The data statistics were produced using the 25th version of the Statistical Package for Social Sciences (SPSS). The findings reveal that the Ethiopian lease finance sector, while possessing significant growth potential, faces numerous challenges: a lack of leasing expertise, absence of equipment valuers, and restrictions on product types. Further impediments include foreign currency shortages, lack of credit history, funding constraints, and a regulatory framework not conducive to business operations. Leasing companies also suffer from a limited number of domestic equipment suppliers, and a general lack of public awareness. Compounding these issues are political instability, rising machinery prices due to inflation, and fluctuating foreign exchange rates, which create financial strain for leasing companies and their SME clients. Despite these barriers, the research suggests substantial prospects for the lease finance sector in Ethiopia. Government commitment, fast economic growth and a high growing market, all together puts positive futurity or prospects of the business. This is supported by both the survey and interview findings. Conclusion and recommendations are given based on the survey and interview results. | |
| dc.identifier.uri | https://etd.aau.edu.et/handle/123456789/6130 | |
| dc.language.iso | en | |
| dc.publisher | A.A.U | |
| dc.title | Performance, Challenges, and Prospects of the Lease Finance Sector in Ethiopia: the Case of Addis Capital Goods Finance Company, Oromia Capital Goods Finance Company, and Debub Capital Goods Finance Company | |
| dc.type | Thesis |