Vehicle leasing in Burkina Faso: how it works
In Burkina Faso, car leasing mainly takes the form of finance leases offered by banks and specialised financial institutions to companies, hauliers and professionals, with the vehicle remaining the lessor's property until the final purchase option is paid.
How a vehicle lease works in Ouagadougou
The lessor buys the car, lorry or tricycle chosen by the customer and then rents it to them in return for periodic payments. At the end of the contract, the lessee can exercise the purchase option for a residual amount and become the owner.
Who offers leasing in Burkina Faso
Financial institutions such as Fidelis Finance Burkina Faso and specialised departments of commercial banks, including Société Générale Burkina Faso, offer finance leases. The supply remains concentrated in Ouagadougou and is aimed first at business customers.
A framework regulated by the UMOA
Leasing companies are financial institutions subject to licensing and supervision by the UMOA Banking Commission. Their rates fall under the 24% ceiling that applies to financial institutions, which is separate from the ceiling set for banks.
Companies and vehicle fleets
Mining companies, NGOs, construction firms and security companies use leasing to renew their pick-ups and service vehicles. Leasing preserves their cash for day-to-day operations and fits naturally into the overall financing of Burkinabè SMEs.
Hauliers, taxis and tricycles
Leasing is also used to finance goods lorries, minibuses and delivery tricycles. The lessor analyses expected takings on the Ouagadougou to Bobo-Dioulasso route or towards the ports, as well as the haulier's experience and the condition of other lorries.
Higher first rental and deposit
The contract often provides for a higher first rental, which acts as a down payment, and sometimes a security deposit. The amount varies with the type of vehicle, its useful life and the financial strength of the lessee.
Insurance and maintenance paid by the lessee
Even though the lessor remains the owner, comprehensive insurance, road tax and maintenance are the lessee's responsibility. A total loss without insurance leaves the lessee owing all the remaining rentals to the lessor, with no vehicle to work with.
Tax advantage for companies
For a company subject to corporate income tax, lease payments are in principle deductible expenses. This treatment, to be confirmed with an accountant familiar with SYSCOHADA, explains part of the appeal of leasing for businesses.
Burkinabè employees and lease-purchase
Employees who want a private car find few lease-purchase offers. For them, a bank car loan in Burkina Faso remains the most common solution, with a lien recorded on the vehicle registration card.
Payment default and repossession
If rentals go unpaid, the lessor can terminate the contract and take the vehicle back, since it owns it. This repossession is faster than a standard seizure, which explains why access conditions are relatively flexible.
Leasing practice in Côte d'Ivoire
The Ivorian leasing market is more developed, with more lessors and offers for individuals. The page on leasing in Côte d'Ivoire helps measure the gap with what is available in Ouagadougou.
New and used vehicles
Lessors prefer new vehicles bought from approved dealers, whose residual value is better known. Imported used cars are rarely accepted, because their condition, real mileage and history are hard to verify from Ouagadougou.
Signing a vehicle lease in Burkina Faso
- Choose the vehicle at a dealer and ask for a pro forma invoice in the name of the future lessor.
- Show the lessor the company's financial statements or bank statements and the planned use of the vehicle.
- Negotiate the term, the first rental, the following rentals and the price of the final purchase option.
- Take out comprehensive insurance naming the lessor as beneficiary and sign the lease contract.
- Take delivery, pay each rental when due, then exercise the option to transfer the registration card.
Financial elements of a car lease
| Element | What determines it | Benchmark |
|---|---|---|
| Implicit rate of the rentals | Term and lessee risk | Up to 24% a year for a financial institution, indicative |
| Higher first rental | Lessor's policy | Percentage of the price set in the contract |
| Final purchase option | Estimated residual value | Amount fixed at signature |
| Comprehensive insurance | Vehicle value and use | Premium paid by the lessee |
| Arrangement fees | Amount financed | Per the lessor's price list |
File requested by a Burkinabè lessor
- RCCM and IFU of the company or haulier
- Recent financial statements or bank statements
- Dealer's pro forma invoice
- CNIB of the manager
- Transport licence for commercial use
- Customer contracts showing the activity
Common misunderstandings about leasing in Burkina Faso
- Believing you own the vehicle from delivery, then selling or modifying it without the lessor's agreement.
- Skipping comprehensive insurance to cut costs, and having to pay the rentals alone after a serious accident.
- Signing a contract without reading the purchase option amount, and discovering a high residual value at the end.
- Paying a deposit to a so-called unlicensed leasing company found on social media.
Burkinabè car leasing: your questions
Can a private individual lease a car in Burkina Faso?
Offers for individuals remain rare. A few lessors consider files from salaried executives, but most contracts involve companies, professionals or hauliers who have an RCCM and an IFU and can show regular business income.
What is the difference between leasing and a car loan?
With a loan, the borrower becomes the owner immediately and the bank takes a lien. With leasing, the lessor remains the owner until the option is exercised, which makes it easier to take the vehicle back if payments stop.
Can a tricycle be financed through leasing?
Some institutions finance delivery tricycles and motorbikes through hire-purchase. As the amounts are small, microfinance institutions also offer similar arrangements, with a down payment and weekly repayments suited to daily earnings.
What happens at the end of a lease contract?
The lessee can exercise the option by paying the residual value, return the vehicle or, depending on the contract, renew the lease with a new vehicle. If they buy, the registration card is then transferred into their name.