Leasing in development : guidelines for emerging economies

Abstract

For 35 years, International Finance Corporation (IFC) has been actively promoting the role of a vibrant leasing sector in developing countries, through a combination of policy and regulatory advice, awareness-raising, and investments in equity, debt and structured finance facilities in leasing companies and banks. This is because lease financing has proven to be an important tool to provide access to investment finance for Small and Medium Enterprises (SMEs), especially in emerging economies where SMEs provide strong growth and employment opportunities, but lack access to financing due to a limited development of capital markets and banking sector. This second edition builds on the initial guidelines, and takes into account IFC most recent lessons learned with leasing, as well as recent market trends in developed and developing countries. Since 2005, a lot have happened indeed in the global leasing landscape. Many countries have implemented robust laws and regulations for leasing; bank and non-bank financial institutions all over the emerging world have realized the opportunity to better serve their SME clients; new developments in sustainable energy finance, Islamic finance, agriculture finance call for a still increased role for lease financing; new accounting rules for leasing have been established; and offer new opportunities and threats that need to be well understood.