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By:Aditya SharmaFabienRahul

DoiphodeVirender Singh

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Extensive Literature Review- Analyzing and structuring the objectives properly

Preparing the Research Design including SampleDesign

Collecting the Data Primary data

Secondary data

Analysis of Data

Generalisation and Interpretation drawn from theanalysis of the data

Preparation of the Report or Presentation ofResults-Formal write ups of conclusions reached.

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Primitive technique Present from generations

Caters technology to a large population with

minimum investment Gives opportunity to entrepreneurs with

scarce financial resources

Started in India through co-operatives

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Phase I Started in 1904

Became a provincial subject by 1919

Phase II Large number of co-operatives founded by

committee setup in 1945

Supported by RBI

Phase III NABARD was established in an attempt to resolve

the frozen assets concern due to heavy repayment

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Phase IV Problem of frozen assets have not been resolved

Co-operatives are at a financial risk

Managers need to look for alternatives

Leasing can be an option against direct credit

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Original financing technique for mid term andlong terms

Done by financial firms and manufacturersdirectly

Leasing is more rigid than renting

Avails the use of assets without purchasingthem

Used in leading industries like IT, healthservices, etc.

Proactive lending

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Basic terms of leasing Contracts last from 3 years to 10 years

Fixed owner, given only for temporary use

Periodic payments are made to the owner

Lease cannot be cancelled At the end of the lease client can purchase the

equipment or property given on lease

Types of leasing Operational leases Financial leases

Hire-purchase lease

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Done in many sectors Lacks in agriculture sector due to

Insufficient technology

Not easily accepted by managers of co-operatives

Lack of proper knowledge

Lack of support from banks

Lack of good government policies

Requires two major analysis Incentives in leasing rather than monetary debt

Cash flow from leasing v/s debt

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Increased financing availability of thecompany

Through leasing one can ensures rapidrecovery of assets in case of insolvency of thecompany which is the lessee;

Leasing allows splitting the risk between theleaser and the lessee;

Flexibility; A number of tax benefits through cost-

benefit accounting.

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Larger investments by companies with lessfinancial resources

the cost of capital assets is spread over theuseful operating life;

avoiding capital restraints; allows precise quantification of the costs of

leasing over the entire duration of the contract; Helps avoiding bureaucracy Lease also preserves existing line of credit.

No interest rate associated with lease payments. Insurance and warranty payments are made byleaser

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Ownership over assets Fixed costs

Cost of fund and liquidity

Measure of residual value analisys

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Role of bank Easier conditions in giving loans to MFI

Lower rate of interest

Availability of loans without collaterals

Role of government Better policies

Clear terms and conditions of leasing

Quick resolution in courts regarding these issues

Role of manufacturers Enter the leasing market themselves

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Primary data collection Visiting some of the cooperatives

Visiting some of the existing model like renting (ex.Kartara tractors)

Survey Interview the banks manager, some government

agencies, dealers etc.

Questionnaire for the farmers and cooperatives

Experimental Quasi design for a possible lease model

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