84 Chapter 6 - Microleasing: Overcoming Equipment-Financing BarriersAmérica Leasing, S.A., and the IFC in PeruAmérica Leasing, S.A. is a specialized leasing company supervised by the Peruvian Superintendent of Banksand Insurance companies. 8 It began operations in 1995 and currently offers financial leases to microbusinessesand to small and medium-size enterprises.América Leasing is the largest company in Peru that specializes in leasing and that is not part of abanking group. As of December 2006, the company held a 6.5 percent share of the Peruvian leasingmarket (measured by portfolio amount) and a 14.1 percent market share (measured by number of contracts). Itis primarily involved in the transportation, industrial, and commercial segments of the leasing market, whichtogether represent 60 percent of the company’s leasing portfolio.América Leasing’s low average lease amount reflects the size of its target segments—small and mediumsizeenterprises. As of December 2006, 91 percent of the company’s portfolio was in business with less thanUS$21 million in annual sales. The average size of its contracts was US$67,700, compared to US$149,800 forthe overall leasing market. The diversified leasing portfolio reached US$127.5 million, with 1,877 active clientsin transportation (26 percent), trade (18 percent), industry (16 percent), and equipment (14 percent).In support of América Leasing’s expansion plans, the IFC provided a US$10 million loan and a technicalassistance program in 2007. The project helps the company fund its portfolio growth, diversify its financingsources, and strengthen its presence in the small and medium-size enterprise segment.Recommendations for a New Microleasing ProgramMFIs planning to offer long-term lending for equipment should consider leasing as an alternative. They willneed to evaluate the financial aspects and the legal and taxation framework to assess all of the costs associatedwith a lease, both for the institution and for their clients. Surveys with experienced clients can help to determinewhether there is enough interest to justify the development and piloting of a microleasing product.Government authorities should adopt a clear legal definition of financial leasing and treat leasing and lendingequally under the tax codes. A standard definition of financial leasing should replace the broad array ofdefinitions currently found in the various tax laws in Latin America, because a tax system that distinguishesbetween the two arrangements distorts the market.As the experiences of the three Latin American MFIs demonstrate, the challenges to launching a leasingproduct are significant. The rewards for clients, however, can outweigh the initial costs of design and setup.Effective <strong>risk</strong> mitigation strategies limit the MFI’s exposure and provide incentives for prompt repaymentby clients holding leases. Given the proper market and legal and regulatory conditions, MFIs shouldconsider adding leasing to the list of financial products they offer to existing and future clients.8. See América Leasing, S.A., http://www.alsa.com.pe/index.html.
Managing Risk and Creating Value with Microfinance85ReferencesFraslin, Jean-Hervé. 2003. “CECAM: A Cooperative Agricultural Financial Institution Providing CreditAdapted to Farmers’ Demand in Madagascar.” Case Study, International Association for Agriculturaland Rural Credit–ICAR, U.S. Agency for International Development, Washington, DC, and WorldCouncil of Credit Unions, Inc., Madison, WI.Goldberg, Michael. 2008. “Microleasing: Overcoming Equipment-Financing Barriers.” en Breve 140: 3.IADB (Inter-American Development Bank). 2009a. “Deepening the Bolivian Leasing Market.”http://www.iadb.org/projects/loan.cfm?loan=ATN/ME-8989-BO.———. 2009b. “Micro, Small, and Medium Enterprise.” http://www.iadb.org/sds/mic/.Westley, Glenn. 2003. Arrendamiento y préstamo para equipo: Guía para el microfinanciamiento.Washington, DC: Inter-American Development Bank.———. 2007. “Préstamos y arrendamiento para equipo: Guía para las microfinanzas.” Paper presented at aworkshop at the World Bank, Washington, DC, October 17.Additional SourcesBanking with the Poor Network. n.d. “Microleasing in Livelihood Restoration following a Natural Disaster,”Brief 5, Banking with the Poor, Singapore.Dowla, Asif Ud. 2004. “Microleasing: The Grameen Bank Experience.” Journal of Microfinance 6 (2): 137–60.Gutiérrez, Eduardo. 2007. “Micro leasing de ANED: Equipamos tu esfuerzo.” Paper presented at a workshopfor the World Bank, La Paz, October 17.Moncada, Mario José. 2006. “A Push for Leasing.” La Prensa (Managua), February 2.Westley, Glenn. 2003. “Microleasing: The Unexplored Financing Instrument.” Microenterprise DevelopmentReview 6 (1): 1–5.