Technical Manual - Leasing - INDES

This paper is a technical manual on leasing prepared from the experiences of Inversiones para el Desarrollo S.A. (INDES). INDES, created in 1987, has evolved into an institution that offers a variety of loan and leasing products aimed at small enterprises in Chile. The paper defines leasing as a short or medium term financing technique for the procurement of machinery, equipment, vehicles or properties based on the proposition that:

• Financial entity (or 'lessor') is the proprietor of the good(s) being financed;
• Lessor rents the good(s) to the client (or 'lessee') for a given period;
• The arrangement is facilitated through a leasing contract;
• Leasing contract includes an option to purchase by the lessor;
• Leasing contract is endorsed by a public notary.

The paper:

• Provides a specific description of the methodology of the leasing services offered by INDES;
• Analyzes the advantages of the leasing product at INDES;
• Evaluates the potential for replicating the leasing product for micro and small enterprises in other contexts through an analysis of the external and internal determinants of institutional performance.