The growth of the financial leasing market is far ahead of the GDP of the country.
Further growth in leasing will be due to leasing operations in new segments of the market, as well as the attraction of municipal budgets to leasing financing schemes.
On April 12-13, the V International Conference “Leasing in Ukraine: New Challenges and Opportunities” was successfully held in Lviv, organized by the Ukrainian Association of Lessors, with the support of the USAID Transformation of the Financial Sector Project.
This year, the forum gathered more than a hundred Ukrainian and foreign participants: lessors, lessees, representatives of executive and legislative power of Ukraine and the European confederation LEASEUROPE, international donors. The conference has become a platform for them to exchange experiences, search for new ideas for the development of the industry.
Speakers and experts of the conference were Ukrainian Parliament members, heads of committees of the Verkhovna Rada: Mikhail Dovbenko, Ruslan Demchak, Viktor Galasyuk; representatives of the executive branch Alexander Zaletov (the National Financial Services Commission), Alexander Sobolev (SMI); from the banking leasing market – Sergiy Tigipko (Toskombank), from importers and dealers Natalia Grytsyshyn (John Dir Ukraine), European experts Frank Van Gouul, Richard Knubben (LEASEUROPE), heads of leading leasing companies in agro and car leasing segments.
Experts predicted that this year, the volume of leasing on the Ukrainian market will grow 1.5 times. Growth can take place through leasing operations in new segments of the market, as well as by attracting budgets of municipalities to such financing schemes.
According to the regulators of the financial services markets (NBU and the National Financial Services Commission), the increase in the volume of financial leasing transactions is demonstrated by both lessors and banks. The total portfolio of lease agreements in 2017 amounted to 40.8 billion UAH, of which deals entered into by legal entities – lessors – in the amount of 22.8 billion UAH, and leasing agreements of banks – in the amount of 18 billion USD.
As noted by Alexander Zaletov, a member of the National Financial Services Commission: “The portfolio of leasing companies is now growing faster than the GDP of the country. So in 2017, the value of financial leasing contracts increased by 32%. And we see that this trend continues. ”
The further development of non-bank business financing forms in Ukraine will depend on how quickly parliamentarians will agree to change the rules of the game on the non-bank financing market. For example, there is a very important bill “On financial leasing”. It will create the necessary conditions for attracting additional investments into the economy. Other speakers emphasized the obstacles that exist in updating key means of production and suggested different ways and models for overcoming them.
Summing up the results of the Forum, we can say that the growth of leasing can occur due to the development of new segments, which had not been developed before. In particular, the construction market, the creation of compensation schemes and financial instruments for the development of housing and commercial real estate. Financial leasing can be effective in improving the work of local government. The latest decisions of city councils of Lviv and Ternopil on procurement through financial leasing of municipal transport – one of the brightest examples of the fact that leasing is effective not only in business. Such agreements not only address the issues of improving the service for the customers, but also reduce the burden on the budget.
The participants of the conference came to the conclusion that the possibilities of financial leasing in Ukraine are used to a lesser extent than it is in developed economies, so its potential remains unfulfilled. Agree with the fact that it is extremely important to create conditions for its disclosure – normative, tax, administrative. The developed infrastructure and state programs can create the ideal conditions for reaching the European level of penetration of leasing in the country’s capital investments – 20-40%, whereas today this indicator in Ukraine does not exceed 4%. Growth can be achieved both through the intensification of traditional spheres of transport and agricultural machinery, and new ones – innovation, green energy, medicine, real estate, etc.
The Ukrainian Association of Lessors, following the conference, will propose to the government and profile ministries a number of concrete steps to effectively re-load the leasing market to restore economic growth.