Buffalo, Bakeries, and Tractors: Cases in Rural Leasing from Pakistan, Uganda, and Mexico

This paper presents case studies from three leasing companies that highlight the relevance and potential of rural leasing as a financing tool. Finance leases are close substitutes for loans as asset financing tools. Organizations that provide asset financing find that leasing offers several advantages. These include an increase in the number of rural clients, little or no lease losses, good performance of rural portfolio and profitability. It also offers clients access to the formal financial system. The paper examines rural leasing in three firms from Pakistan, Uganda and Mexico. The paper derives the following lessons from the case studies:

• Rural leasing is a means to acquire productive assets;
• Rural enterprises of different sizes benefit from leasing, but a provider may not be able to serve enterprises of all sizes;
• Non-farm enterprises account for a significant proportion of rural leases;
• Rural leasing can be profitable, but jump-starting rural leasing may require government and donor support;
• Rural leasing companies may not be viable.