Ijara Management Company - IDB Group Business Forum

Exploring new models of CIS leasing Companies:The Way ForwardDushanbe Business Forum 2013

1.Worldwide Leasing Industry1

Overview• After the Global Financial crisis of 2007- 2008, theleasing industry’s fortunes began to improve in2010 and the year 2011 witnessed the increase innew business volumes by 34.1% to a recordUS$797bn.• The depth of the improvement is illustrated by theperformance of the top 10 countries (representing80% of the world volume). In 2009, nine of the top10 experienced negative growth in new business,the exception being China. In 2011 nine out of 10experienced positive growth, the exception beingItaly. Twenty-four of the 50 countries reporteddouble-digit growth, with five reporting morethan 50% growth in new business.Rank byVolumeRegionAnnualVolume(US$bn)Source: White Clarke Global Leasing Report% of Worldmarketvolume 20111 Europe 302.7 38.02 N America 292.5 36.73 Asia 153.4 19.34 S America 27.5 3.55 Aus/NZ 12.0 1.56 Africa 8.6 1.1Total 796.7• Every region reported improved performance in 2011 as compared to 2010. North America, inparticular, delivered a remarkable 37% growth. New business in Asia grew by 27%, Australia/NewZealand by 11%, South America by 8% and Europe by 7%.2

Top 20 Countries in terms of LeasingVolume in 2011 and RankingRanking CountrySource: White Clarke Global Leasing ReportLeasing Industry in the WorldAnnual leasingvolume (USD bn)1 US 268.82 Japan 73.543 Germany 68.594China (People’sRepublic)60.395 UK 51.626 France 33.37 Italy 22.948 Russia 22.849 Canada 22.4510 Switzerland 11.8511 Australia 11.5512 Brazil 10.4313 Korea 9.5714 Poland 9.2815 Sweden 9.2316 Denmark 7.7217 Norway 7.6618 Colombia 7.5619 Austria 7.4620 Spain 7.12Top 20 Countries in terms of LeasingVolume as a % of GDP in 2011Ranking Country% of GDP1 Estonia 5.132 Cyprus 4.333 Latvia 2.894 Finland 2.485 Denmark 2.466 Colombia 2.457 Peru 2.248 Slovenia 2.249 Switzerland 2.1810 Czech Republic 2.1611 UK 2.1512 Germany 2.0413 Austria 2.0414 Poland 1.9815 Sweden 1.9416 Chile 1.8917 Puerto Rico 1.8418 Norway 1.819 US 1.7720 Bulgaria 1.753

Growth of new leasing deals in the world in 201170.0%60.0%50.0%40.0%30.0%20.0%10.0%0.0%-10.0%*64.7%42.9% 38.9%24.0%12.6% 11.1%6.8% 6.5% 4.8% 1.0%-8.0%*Leases mostly includes trains and wagons4

2.About CIS5

Commonwealth of Independent States (CIS)Micro Economic Statistics 2012CountryPopulation(USD Mio)GDP(USD Mio)GDPgrowthGDP per capita(USD)Belarus 9.46 58,215 4.30% 6,710Kazakhstan* 16.86 210,642 5.20% 11,700Kyrgyzstan* 5.65 6,197 0.80% 1,100Russia 143.37 2,053,000 3.40% 14,240Tajikistan* 8.01 7,263 2.10% 900Uzbekistan* 29.87 51,622 4.10% 1,800Azerbaijan* 9.24 71,043 3.80% 7,500Moldova 3.56 7,589 4.40% 2,100Ukraine 45.55 175,174 0.20% 3,870Armenia 3.27 10,551 2.10% 3,500Turkmenistan* 5.17 33,466 6.90% 6,100* ICD Member countries6

3.ICD in the Leasing Sector7

Leasing initiatives – Milestones so far…20082009201020122013• AnsarLeasing,Azerbaijan• ArabLeasing,Sudan• TAIBA Leasing,Uzbekistan• IjaraManagementCompany*(IMC)• EuroasianLeasingCompany,Kazan(throughTIIC)• ASR Leasing,Tajikistan• Kazakhstan IjaraCompany• Albania Leasing(under registration)• Projects inPalestine andAlgeria(under formation)* IMC was incorporated as a management company to assist in the successful set up ofleasing companies on a turnkey basis and provide management and technical services to allthe leasing projects.

Leasing initiatives – Pipeline projectsFS* stage• Saudi Arabia• Morocco• EgyptPre-FS stage• Bahrain• Kurdistan• KyrgyzstanIdentifiedmarkets• Senegal• Cameroon• Nigeria* Feasibility Study

4.About IMC10

IMC’s Value AdditionInstallation of softwarewith end to end Ijarasolutions developed onOracle 11gTo assist in recruitmentprocess for senior levelteam and conduct trainingworkshop for increasingemployee productivity/efficiencyTo provide readily availableOperating policies andmanuals in line with thelocal regulatory/legislativerequirements - to ensureimmediate kick start of theProject.Assist in fund raisingprocess locally or frominternational financialinstitutionsScientific riskassessment methodsto result in reducedNPAs

5.Challenges in the Islamic Leasing13

Challenges in Islamic LeasingChallenges Background MitigationRegulationsLimited availability offundsEducation & TrainingTechnology &InvestmentsIslamic InsuranceExit for InvestorsLack of specific regulations on Leasingsector, especially Islamic LeasingLimited availability of Medium/Longterm Islamic fundsShortage of leasing professionals &experts and manpowerInvestments are kept at very low leveland also with not up-to-datetechnologyLeast developed sector in the IslamicFinance SectorUnderdeveloped Debt Market/ StockexchangeICD works with various regulators andgovernments to establish leasing laws to enableIjara companies to grow and add value to theeconomy.IMC ensures that the company follows highest standardsof Corporate Governance and best InternationalPractices in terms of Debt-equity, Provisioning, etc.IMC works closely with the leasing projects to raiseIslamic funds locally (in case of its availability) and alsowith other International financial institutions.IMC assists in recruitment process of employees andconducts regular training workshops. Shariah Advisoryservices from eminent Scholar are also provided.IMC provides its sophisticated “State of Art” softwarewith end-to end Ijara solutions, specially designed forfinancial institutions committed to differentiating itselfand deriving additional revenue.ICD has initiated development of Takaful insurancesector in many member countries.Inviting new partners/investors to join14

6.Opportunities in SMEs sector15

Opportunities in SME SectorBreedInnovationGenerateemploymentDiversify theeconomySustainableDevelopment ofSocial andEconomicCapitalForm acompetitivemarketplaceFacilitateSocialmobilityPromoteinternationaltradeSMEs are recognised as a key source of growth, dynamism, innovation and flexibility16

Contact usSanjeev Kumar ChadhaChief Executive Officer245, 19th Floor, Platinum Tower,Seef Business District,Kingdom of BahrainE-mail: schadha@ijara.coTel: (+973) 170 04601, 133 44604Fax: (+973) 170 04602www.ijara.co17