Home >Documents >IFC Mongolia Leasing Industry Report 2008 ENG

IFC Mongolia Leasing Industry Report 2008 ENG

Date post:29-Aug-2014
Category:
View:48 times
Download:0 times
Share this document with a friend
Transcript:

Government of Japan

MONGOLIA LEASING INDUSTRY SURVEY

Ulaanbaatar - 2008

IFC MONGOLIA LEASING DEVELOPMENT PROJECT

Mongolia Leasing Industry Survey, 2008. Annex 1: Main Indicators of Mongolian Leasing Industry

This publication may not be copied partly or in full without prior written permission of copyright owner. This publication has been prepared for guidance only and is not intended to be exclusive. Despite the fact that this publication has been compiled with the highest care it should be used neither as a substitute for legal advice nor as a basis for adoption of business decisions. Views expressed in this publication are those of its authors and do not necessarily reflect the views of IFC, IBRD, or the Government of the country supporting the implementation of the IFC Mongolia Leasing Development Project.

2008 International Finance Corporation Pennsylvania Avenue NW, 2121 United States of America Member of the World Bank Group

Mongolia Leasing Industry Survey, 2008

ACKNOWLEDGEMENTS IFC would like to thank the leasing providers who participated in the survey. We believe that the survey will be useful to all market players, policy makers, investors, financial institution, and will help leasing providers compare themselves with others, while also identifying opportunities for growth. IFC would like to thank Solo Center Co. Ltd (Mongolia) and Ms. Hongorzul Dari, PhD, a former Mongolia Leasing Development Project Financial Specialist, for their participation in this project: IFC engaged Solo Center Co. Ltd to distribute the survey questionnaires and collect responses, and Ms Hongorzul Dari to analyze data and draft this report. IFC would also like to thank the government of Japan, who financed this study.

3

Mongolia Leasing Industry Survey, 2008

TABLE OF CONTENTS

EXECUTIVE SUMMARY .............................................................................................. 6 SECTION ONE: MACROECONOMIC SITUATION................................................. 8 1.1 General Overview ......................................................................................................... 8 1.2 Financial Sector ............................................................................................................ 8 SECTION TWO: LEASING INDUSTRY OVERVIEW............................................ 10 2.1 Leasing Industry.......................................................................................................... 10 2.2 Providers of Leasing ................................................................................................... 14 2.2.1 Banks............................................................................................................ 14 2.2.2 Suppliers of Equipment and Machinery....................................................... 16 2.2.3 Independent Leasing Companies and NBFIs............................................... 17 2.2.4 Other Lease Providers ................................................................................. 19 2.3 Sources of Financing................................................................................................... 20 2.4 Overdue Payments ...................................................................................................... 20 2.5 Main Barriers to Leasing Development ...................................................................... 21 2.6 Conclusion .................................................................................................................. 21 SECTION THREE: LEGAL FRAMEWORK FOR LEASING ................................ 22 3.1 General Overview ....................................................................................................... 22 3.1.1 Legal Environment Awareness .................................................................... 23 3.1.2 Dealing with courts...................................................................................... 24 3.2 Accounting and Taxation of Financial Leasing .......................................................... 24 3.3 Constraints for Further Development ......................................................................... 25 3.4 Conclusion .................................................................................................................. 26

Annex 1. Main Indicators of Mongolian Leasing Industry, 2003-2007, by category of lease providers .......................................................................................... 28 Annex 2. Survey Methodology......................................................................................... 29 Annex 3. Survey Questionnaire........................................................................................ 30

4

Mongolia Leasing Industry Survey, 2008

LIST OF TABLES Table 1.1. Main Ratios of Mongolian Financial Sector, %, 2000 - 2006 ........................... 9 Table 1.2. Lease Providers by Categories, 2003-2007 ..................................................... 11 Table 1.3. Key Ratios for the Mongolian Leasing Industry, 2003 - 2007 ........................ 13 Table 2.1. Average Lease Conditions by Banks, 2003-2007............................................ 15 Table 2.2. Average Lease Conditions by Equipment Suppliers, 2003-2007 .................... 17 Table 2.3. Average Lease Conditions by Leasing Companies and NBFIs, 2007............. 19 Table 2.4. Average Lease Conditions by Other Lease Providers, 2006-2007 .................. 19 Table 2.5. Sources of Financing, 2004-2007 .................................................................... 20

LIST OF CHARTS Chart 1. GDP growth, % .............................................................................................. 8 Chart 2. Number of Lease Providers, 2003 2007...................................................... 11 Chart 3. Outstanding Lease Portfolio by Lease Providers 2007.................................. 12 Chart 4. Total Lease Portfolio 2007, by sector ............................................................ 13 Chart 5. Total Lease Portfolio 2007, by type of lessors............................................... 14 Chart 6. Total Lease Portfolio of Banks 2007 ............................................................. 15 Chart 7. Total Lease Portfolio of Equipment Suppliers 2007...................................... 16 Chart 8. Total Lease Portfolio of Independent Leasing Companies 2007 ................... 18 Chart 9. Total Lease Portfolio of NBFI 2007 .............................................................. 18 Chart 9. Leases > 90 Days Overdue 2003 - 2007 ........................................................ 20 Chart 10. Key Barriers to Leasing Development 2008................................................ 21

5

Mongolia Leasing Industry Survey, 2008

EXECUTIVE SUMMARY The Mongolian leasing industry has shown signs of positive growth over the past two years. Macroeconomic stability and growth, coupled with important legislative initiatives, have encouraged foreign and domestic investment in the sector. The IFC Mongolia Leasing Development Project, with support by the Japanese government and IFC trust funds, played a key role in spurring this growth by lobbying for important legislative changes, including the Law on Financial Leasing (passed in June 2006), conducting training and consultations for leasing companies, and raising awareness about leasing in general. Since the project closed in September 2006, however, no comprehensive market survey has been conducted to measure this growth. IFC, therefore, endeavored to measure exactly how much the leasing industry has grown as a result of the legislative reform and project activities. The survey was conducted in April 2008. Respondents were asked to give financial activity data as of December 31, 2007. Forty-eight lessors were included in the survey sample, representing 100 percent of the leasing services providers in Mongolia. Various methods of collecting information were used in the preparation of this analysis, including polling leasing companies in person, as well as interviews with government officials and other market participants. The survey shows significant positive development of the leasing industry in Mongolia. The total volume in new leases reached almost $90 million in 2007, more than double the volume in 2006, and over eight times the leasing volume in 2005. The leasing industry has been growing rapidly, reaching a total volume in the outstanding leasing portfolio of over $80 million in 2007, almost three times the leasing portfolio in 2006 and a seven-fold increase over the leasing portfolio in 2005. The number of lease providers almost quadrupled -- from 13 in 2005 to 48 in 2007 reflecting the positive changes in the legal environment for leasing industry in Mongolia. The main lessors are banks and equipments suppliers, constituting the bulk of the portfolio. The market is diversified, though cars, consumer items, and mining equipment still make up a large percentage of the portfolio. The share of leasing as a percentage of Gross Domestic Product (1.6 percent in 2007) and in the total loans provided by the banks (3 percent in 2007) has been increasing over the last years, showing that leasing is becoming one of the important sources of financing. The repayment rate was high for all lease providers, well over 90 percent. The sector has stabilized to some degree as indicated by the more favorable terms offered longer term durations and lower interest rates.

6

Mongolia Leasing Industry Survey, 2008

However, there is still room for further improvement in legislation like resolving contradictions between various legal acts, providing more favorable conditions in taxation, and clarifying vague provisions.

Popular Tags:

Click here to load reader

Embed Size (px)
Recommended