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On the continent, Wesbank extends funding to companies that buy aircraft, heavy earth-moving machines, trucks, tractors, and other moveable industrial capital equipment.
Chris de Kock, the general manager at Wesbank's corporate division, said the lender has a dedicated team that specialises in financing aircraft acquisitions for corporates doing business in Africa.
"Aircraft financing is a very specialised business that requires experts who understand the complexities of the aviation industry," de Kock said.
He said Wesbank services firms operating in industries such as mining, construction, and agriculture - key sectors across the continent.
Careful not to go it alone
De Kock said the ongoing commodities and oil price boom was underpinning economic growth in Africa and, as a result, many corporates were buying new capital equipment to expand production.
"There is lots of mining and construction that is happening in Africa. In order to get some of these projects off the ground, corporates need to invest in capacity. They need new machines to raise production and aircraft to move goods around," he said.
Wesbank is careful not to go it alone. De Kock said the company has set up partnerships with suppliers of the machines and aircraft.
The partners include earth-moving machine manufacturers like Catapillar, Bell, Komatsu, Liebherr and aircraft supplier National Airways Corporation (NAC).
'Risk of operating in Africa is high'
"The risk of operating in Africa is high if you don't have a supplier as partner. If there is a problem, our partners help us take possession of our assets," said de Kock.
"For instance, if we finance an aircraft in Cameroon and the owner stops paying, we have NAC to help us bring the aircraft back to South Africa," he added.
The asset finance industry on the continent is dominated by Wesbank, HSBC, Barclays, Standard Chartered and Lloyds. The likes of Standard Bank, Nedbank, Absa are also involved.
At this juncture asset financiers are wary of lending to ordinary Africans on the street, preferring to deal with reputable companies, small and medium-sized businesses, and African governments that are cash-flush with commodities tax revenues.
Wesbank's loan book is indicative of its cautious strategy in Africa and is heavily biased towards South Africa. Its loan book for South Africa is R85bn, of which R60bn is mainly advances to car buyers while African loan book is worth $60m (R466m).
'Good opportunities'
Marcel de Klerk, the managing executive at Absa Vehicle and Asset Finance, said the lack of credit bureaus and limited property rights protection made it difficult to lend to ordinary people on the continent.
Apart from this, people relied mainly on second-hand imports from East Asia, which banks were scared to finance due to concerns about their quality.
"Property rights in other parts of Africa are not as clear cut as in South Africa. We need to ensure that the regulatory environment allows us to repossess assets if we have to," de Klerk said.
However, South African asset funders are comfortable with providing credit to both corporates and ordinary citizens in countries that border South Africa.
"In Botswana, Namibia, Lesotho, and Swaziland, you find a good blend of retail and corporate, similar to what we have in South Africa," said Marius Wait, the director for products at Stanbic.
"As we go to the rest of Africa, the personal market is starting to emerge. This presents us with good opportunities to provide asset finance in those markets," Wait said.
