Leasing for Small and Micro Enterprises: A Guide for Designing and Managing Leasing Schemes in Developing Countries

This guide focuses on small and micro enterprises, and aims to help managers of non-government organizations (NGOs) and microfinance institutions (MFIs) to start a leasing scheme.

The guide states that:

• MFIs that want to develop viable leasing programs have to make considerable investments in staff training and systems development;
• The difference between a "lease" and a "loan" affects the whole organization;
• Product developers need to familiarize themselves with lease product design and pricing issues;
• Senior managers need to explore possible partnerships for the leasing program;
• Accountants need to know the different accounting and taxation issues related to leasing;
• Loan officers, with experience in credit evaluation, have to adjust their perspectives in order to deal with equipment finance.

The guide:

• Introduces the essential basic principles of a lease operation;
• Presents the life cycle of a lease from the moment an entrepreneur selects a piece of equipment to the transfer of ownership at the end of the lease term;
• Focuses on marketing the lease product and explores ways of packaging and presenting lease products adapted to the needs of identified client groups;
• Explains pricing, both from the perspective of the lessor and the lessee;
• Discusses the legal and regulatory environment for leasing, including licensing and prudential requirements;
• Deals with taxation;
• Introduces accounting practices for different types of lease products and methods of monitoring the leasing scheme.