ATÄ°B: Leasing companies suffer low capitalization

ATÄ°B: Leasing companies suffer low capitalization
# 01 May 2009 13:22 (UTC +04:00)
Baku. Nijat Mustafayev - APA-Economics. Azerbaijan-based leasing companies suffer very low capitalization, said a report released by the Azerbaijan-Turkey Business Association (ATIB).

According to the report, leasing companies primarily focus on bank loans because securities market remains underdeveloped in the country.
It is for this reason that leasing companies owned by banks are more active but adversely affected by the recent trends in the banking sector.

“The development of the leasing market is also adversely affected by the imposition of VAT on leased equipment imports, insufficient regulation of the leasing market, the impossibility of applying “accelerated amortization” method for leased property and lack of skilled manpower,” said the report.

The report highlighted a need to address these problems, as well as establishing a mechanism for providing long-term funds to leasing companies through financial resources from the state budget, State Oil Funs and Central Bank, tightening control over the cost-effectiveness, revising credit and risk procedures, tightening monitoring and evaluation of leasing orders, launching new retail micro-leasing products.

The report also provides several other recommendations for the development of leasing sector.
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