2023 | Agriculture & Agribusiness

Study of the Leasing Market for Agricultural and Medical Equipment in Togo

#Agri value chains #Agribusiness #Agritech #Benchmark #Feasibility study #Financing #Leasing #Market research #Uses cases

Context & objectives:

Recognizing its potential and impact, Togo enacted its leasing law in 2019 to lay the foundation for leasing activities. This initiative was supported by IFC’s advisory services, which contributed to the review and development of various related decrees. The agriculture and health sectors are essential to Togo’s development. Modernizing these two sectors through the use of equipment is very important. However, both sectors face significant growth barriers, notably due to limited access to financing and appropriate financial products and services. Leasing emerges as an excellent alternative to traditional credit financing to meet the equipment financing needs in the medical and agricultural fields. Through this study, IFC aims to assess the demand and supply of medical and agricultural equipment in Togo, as well as the leasing finance potential.

Main achievements & impacts

Regulatory and Environmental Analysis

Inventory of regulatory texts (laws, decrees, etc.) governing the agricultural and medical sectors as well as leasing in Togo

Identification of national and regional projects and initiatives (subsidies, tax incentives) supporting equipment operations and financing in both sectors

Identification of regulatory challenges and obstacles (regulatory, financial, fiscal) hindering the development of leasing in these two sectors

Demand Analysis for Agricultural and Medical Equipment

Mapping and analysis of equipment users in both sectors

Conducting interviews and focus groups with farmers, cooperatives, and agro-industrial players in the cotton, maize, soybean, and pineapple value chains

Conducting interviews and focus groups with medical offices, laboratories, clinics, and private hospitals

Determination of the main equipment used by targeted actors in both sectors

Evaluation of equipment usage and identification of challenges regarding access to this equipment and its financing (key market trends and dynamics, demand drivers, selection criteria, financing access and conditions, etc.)

Supply Analysis of Agricultural and Medical Equipment

Identification and segmentation of the main equipment suppliers

In-depth analysis of 3 suppliers in each sector (positioning and business model; main products offered: models, brands, origin; pricing levels per product; supply chain and distribution channels; maintenance and after-sales services, etc.)

Conducting in-depth interviews with 3 agricultural equipment distributors

Conducting in-depth interviews with 3 medical equipment distributors

Estimation of Market Size

Estimation of current and target market sizes in both sectors and identification of the financing gap that could be filled by the development of leasing

Analysis of Financing Offer in Both Sectors

Mapping of financial institutions and analysis of their financing offers

Conducting in-depth interviews with 4 leasing companies / commercial banks in the market

Analysis of financing contributions in both sectors and financing conditions (amounts granted, durations, costs, required guarantees, etc.) via bank loans and leasing

Proposal of a New Leasing Business Model

Development of a new leasing business model involving financial institutions, suppliers, and equipment users, highlighting benefits for each stakeholder