Computer leasing model to the rescue of Kenya startups
Kenyan startups struggling to buy computers and other electronics are finding a cheaper alternative through a leasing model that allows them to rent the computers for a specific period of time.
The model allows the businesses to hire computers, laptops and IPads allowing them to buy the machines at their own pace. Lightshine Technologies Ltd one of the companies leasing the computers says it has worked with 20 such startups in key towns in Kenya. The model which has been entrenched in economies like India has been credited with faster adoption of technology while earning billions of dollars in revenue. To businesses it is viewed as a viable and cost effective option especially to those that have no cash at hand but require the equipment.
Computer leasing companies in like Lightshine Technologies have been targeting early stage businesses which are just setting up and need computers and laptops for employees, as well as established companies seeking to upgrade their computer equipment in the quest to remain on the cutting edge of technology.
The model is also assisting early stage businesses to experiment with the new technologies which they would later buy at their own pace based on their experiences with different brands, size and type.
The early businesses are also turning to leasing computers to evade the hustle that comes with owning equipment such as break downs, damages, repairs, maintenance and possible loss.
Victor Mwema Group General Manager at Lightshine Technologies says the leasing of computers and other office equipment is quickly emerging as a booming business. The company rents out laptops for a $35 monthly fee each and a one off refundable $150 deposit. The company also offers expertise at no extra charge, where a company leasing laptops and other equipment is assigned an expert to train on how the equipment work.
“The deposit fee is just a quarter of what a new laptop costs. It reduces our risks, but we also have to vet companies before we give them our equipment. We also sign contracts with our clients. We have, thankfully, never had any instance where a client disappeared with our equipment,” says Mwema.
The company however offers special deals to SMEs. Mwema explains that most small businesses have other priorities other than spending for instance $1500 in buying computers and thus prefer leasing.
Computer leasing is also being driven by businesses seeking to always have the latest, state of the art computers without having to purchase new equipment every year. Experts argue that in just 18 months, a computer's worth is eroded to 25 per cent of its original price.
“Companies do not want to put capital in purchasing laptops which will be obsolete in just 18 months. When they rent a laptop from us, they’re not responsible for breakdown or loss. They concentrate on their core business and don't have to worry about looking for a fundi every time a computer breaks down,” said Mwema.
The firm offers replacement of faulty computers and other equipment within an hour. In the event that a laptop is stolen for instance, they replace the device without an extra charge.
Lightshine Technologies has a portfolio of 610 laptops, 300 desktop computers 72 projectors and 120 screens. At any given time, 65 per cent of the firm’s equipment are out for renting. Mwema adds that sometimes even upto 100 per cent of the equipment is rented, especially when several conferences and events are taking place.
“When a company from far is holding a conference in Embu for example for a week, it is efficient for them to lease 30 laptops from us compared to buying to transportation them,” explained Mwema.
Another player, Strata Online Ltd Computers International ltd is expanding its services across Kenya targeting companies that need to rent laptops for shorter periods of between a day and two weeks. Strata hires out laptops for conferences, training events, seminars and other meetings. The company charges $40 per day for a laptop plus a $500 refundable asset security.