CURRENT PROJECTS
Azerbaijan-Central Asia Leasing Facility
Ukraine Leasing Development Project
COMPLETED PROJECTS
Azerbaijan Leasing Development Project
Central Asia Leasing Development Project
Russia Leasing Development Group
Northwest Russia Leasing Development Project
Urals Leasing Development Project
THE CHALLENGE
In developing economies, leasing can be a powerful source of financing for both SMEs and financial institutions, as it offers a low-risk, medium-term finance for the procurement of equipment. In the CIS countries, however, there were very few financial institutions that offered leasing services. The main obstacle to growth was inconsistent, ambiguous and inadequate legislation, which made it difficult for companies to conduct leasing transactions. Financial institutions did not know how to offer leases, and SMEs remained largely unaware of leasing as an alternative source of finance.
THE IFC APPROACH
IFC works with government agencies to help reform the leasing environment from the top-down, by changing the laws that govern the leasing environment. We also provide in-depth advisory services to both leasing companies and end-users, by strengthening credit risk management and financial controls related to leasing, to help develop the market. Our projects:
Create a favorable legislative environment for leasing. IFC works with key government counterparts to remove legislative barriers to leasing such as double taxation, and clarifying ambiguous rights of parties. This puts leasing on the same grounds as other forms of financing to increase its attractiveness for lessors and lessees.
Build the capacity of leasing institutions. IFC develops the local expertise of leasing institutions by organizing specialized seminars, providing individual consultations, and creating model documents such as lease agreements and financial forms. This ensures that financial institutions can carry out efficient and profitable leasing operations, and new leasing businesses can launch effectively. In some cases, IFC can also provide long-term financing for companies to develop their leasing services.
Expand the client base for leasing. IFC conducts market surveys of the leasing market to inform potential suppliers as well as domestic and foreign investors about the opportunities in leasing. Projects also train SMEs to evaluate alternative financing options and to work with leasing companies.
Educate companies and the public about leasing. IFC projects conduct information campaigns through mass media and public events to increase awareness about leasing, generate more demand, and create public support for legal reform. We have distributed more than 22,000 copies of material related to leasing and generated nearly 1,400 mentions in the media.
ACHIEVEMENTS TO DATE as of July 1, 2007
Helped governments draft and adopt 43 new laws or amendments. IFC has worked to harmonize the legislation related to leasing throughout the CIS region. IFC has helped amend tax codes in Russia, Kazakhstan and Uzbekistan and draft leasing laws that were adopted in Kyrgyz Republic, Tajikistan and Ukraine.
Increased the value of leasing transactions by over $700 million. In Kazakhstan alone, IFC advisory projects have facilitated the growth of the leasing market from roughly $20 million in 2002 to more than $100 million in 2005.
Developed the leasing capacity of institutions and enabled access to financing. As a result of a more favorable leasing environment and assistance from IFC, clients have been able to attract more than $290 million in external financing. IFC has helped attract foreign leasing institutions into the Ukrainian market, including Société Générale, BNP Paribas and Credit Europe Leasing, and helped domestic institutions launch new leasing programs.
Helped set up the first leasing company in 26 countries around the world.
CONTACT INFO
IFC Advisory Services in Eastern Europe and Central Asia
Patrick Luternauer
Senior Operations Manager, Financial Markets
36/1 Bolshaya Molchanovka
Moscow 121069 Russia
Tel: +7 (495) 411-7555
Fax: +7 (495) 411-7556
International Finance Corporation
Global Financial Markets Department
New Investments
Ary Naim
Senior Financial Specialist
2121 Pennsylvania Avenue, NW
Washington, DC 20433, USA
Tel: +1 (202) 458-1471
Fax: +1 (202) 974-4834
