Microleasing : Overcoming Equipment Financing Barriers

As their businesses grow, many microbusiness owners would like to purchase new machinery from a microfinance institution (MFI), since such equipment can hold the key to increasing production. However, MFIs are often not able or willing to lend for longer periods of time, with grace periods that long term lending for machinery requires. Long term financing from other sources is usually not feasible, since banks and leasing companies require collateral, a well-documented credit history and financial statements. For many microbusinesses, leasing could provide an effective alternative to taking on more debt. This note reviews financial and operational leasing, describes two microleasing experiences in Latin America, identifies risks, and provides recommendations for launching a micro-leasing program.

Bibliographic Details

Main Author:	Goldberg, Mike
Language:	English
Published:	World Bank, Washington, DC 2008-12
Subjects:	ASSET VALUE, BALANCE SHEET, BALLOON PAYMENTS, BANKING REGULATIONS, BANKS, CAPITAL NEEDS, CASH FLOW, CASH PAYMENT, COLLATERAL, COMPANY, CONSUMER, CONSUMER LOANS, CORPORATION, CREDIT HISTORY, CREDIT PRODUCTS, DEBT, DEFAULTED LOAN, DEPOSIT, DEPRECIATION, DEVELOPMENT BANK, DISTANCE LEARNING, DOWN PAYMENTS, ECONOMIC DOWNTURN, ECONOMIC MANAGEMENT, EQUIPMENT, EQUIPMENT LOAN, EXPOSURE, FARMERS, FINANCE CORPORATION, FINANCIAL DISADVANTAGES, FINANCIAL INSTITUTIONS, FINANCIAL LOAN, FINANCIAL PRODUCTS, FINANCIAL SERVICES, FINANCIAL STATEMENTS, FINANCING INSTRUMENT, FIRMS, FIXED RATE, GOVERNMENT POLICIES, GRACE PERIODS, HOLDING, HOUSING FINANCE, INFLATION, INSTRUMENT, INSURANCE, INSURANCE POLICIES, INTEREST RATE, INTEREST RATE CEILINGS, INTERNATIONAL DEVELOPMENT, INTERNATIONAL FINANCE, LEASING, LEGAL DISPUTES, LEGAL POSITION, LENDER, LETTERS OF CREDIT, LIFE INSURANCE, LOAN, LOAN PORTFOLIO, LOAN PORTFOLIOS, LONG TERM FINANCING, MAINTENANCE COSTS, MARKET DISTORTIONS, MFI, MFIS, MICRO BUSINESS, MICROFINANCE, MICROFINANCE INSTITUTION, MICROFINANCE INSTITUTIONS, MONTHLY PAYMENT, NATURAL DISASTER, OPERATIONAL COSTS, REGULAR PAYMENT, REGULATORY CONDITIONS, REGULATORY FRAMEWORK, RENTS, REPAYMENT, REPOS, REPOSSESSION, RETURN, RETURNS, RISK MITIGATION, SECONDARY MARKET, SENIOR, SHOPS, SMALL ENTERPRISES, SOLVENCY, SUPPLIER, TAX, TAX ADVANTAGE, TAX ADVANTAGES, TAX BURDEN, TAX CODE, TAX CODES, TAX LAWS, TAX SAVING, TAX SYSTEM, TAXABLE INCOME, TRUST FUND, WAREHOUSE, WORKING CAPITAL,
Online Access:	http://documents.worldbank.org/curated/en/2008/12/10277994/microleasing-overcoming-equipment-financing-barriers https://hdl.handle.net/10986/10265
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