Enhancing the Leasing Enabling Environment - Economic Growth ...

2. Build consensus early among all stakeholders. Little will be accomplished without the
momentum of the government and the financial sector. The desire for leasing and the local
understanding of leasing can be determined in the initial market assessment.
3. Create a local leasing development team. ―Local‖ is the critical word. To further support
consensus and build momentum, it is important to create a team that includes a local attorney
who is respected for legal draftsmanship; members of the local financial sector who strongly
desire the development of leasing; and government officials, preferably from the tax
department, the Ministry of Finance, and/or the central bank. The donor project should be the
facilitator of this team and provide technical assistance from key experts to guide the
essential elements of legal and tax codes. Leasing technical assistance is best suited to give
support to the local advocates and is more effective when outside experts are not in lead
positions. Building a local leasing team is a prerequisite to the introduction of a lease law (or
amendments) and a tax code. Stakeholders must feel there has been an adequate vetting
period; budget time accordingly.
4. Do not underestimate the challenge of passing lease legislation, especially amendments to
the tax code. Changing or passing new lease legislation is a difficult task that requires
patience and persistence. Legislators and the financial sector must have time to thoroughly
understand the value of a new law and the legal implications. Tax codes are especially
difficult because they touch the issues of tax revenues.
5. Direct technical assistance must be provided at the operational level of leasing. Technical
assistance has many dimensions for leasing. In addition to the enabling environment issues,
technical assistance is needed in the leasing companies themselves, at the management and
operative levels.
6. Train the trainers. Leasing companies need guidance and, possibly, some financial assistance
to create workshops on leasing. The leasing companies should take responsibility for their
own market development and educate their borrowers on leasing products and how to apply
for credit. These workshops should be ongoing events and include the rural sector.
7. Include capital funds in projects to support product development. Where leasing is new to
the market, project capital funds will be needed to seed product start-up. Ideally, leasing
companies will step into the first stage without assistance. Once there is some experience
with the first stage, it is critical to provide financial support to help the leasing companies
issue operating leases. Once operating leases are introduced to the market, leasing companies
will begin to be more innovative in servicing the market demand.
8. Offer financial support for training. Support the leasing industry with financial assistance to
attend leasing conferences, trade shows, and lease training programs in the United States
and/or Europe. Find a reputable U.S.- or U.K.-based leasing company that will allow
managers and key personnel from local leasing companies to spend a week observing their
operations. This is a prerequisite for providing technical assistance to existing leasing
companies. Leasing companies’ management and staff are eager to learn modern techniques
from developed countries; they learn well through effective training programs, meeting with
leasing companies from other countries, and watching how successful leasing companies
perform operational and management tasks.
30 FS SERIES #7: ENHANCING THE LEASING ENABLING ENVIRONMENT