ACBA Leasing ACBA Leasing

East - Agri 2006East - Agri 2006

ACBA LEASINGACBA LEASING

I.I. Why an initiative for leasing activities in Why an initiative for leasing activities in Armenia ?Armenia ?

• Credit is too much expensive in emerging markets• Leasing may create sustainable economic

development by increasing demand for investments

• Successful experiences in other emerging markets : Lebanon, Polan…)

II.II. Conditions for setting up leasing activities in Conditions for setting up leasing activities in ArmeniaArmenia

• Elaboration of a feasibility study and business plan– Analysis of potential markets and assessment of demand– Clarification of the legal, fiscal and accounting

environment

• Participation of a local operator, having important financial resources and a confirmed credibility

• Important technical assistance funded by international donors

• An important shareholding capital of the leasing company to be created

ACBA LEASINGACBA LEASING

III.III. Start up of a companyStart up of a company

• Creation of the company : – date of the establishment : April 25, 2003– Share capital: 1 000 000 U$ represented by 100 shares

• Funding and technical assistance– Loans up to 4U$ millions distributed by IFC and Calyon– Cooperation with ACBA Bank

ACBA Bank branches attract more than 30% of the leasing deals, the activity of ACBA leasing allowed to open about 100 new accounts in the books of ACBA Bank

Commission fee paid to ACBA Bank

ACBA LEASINGACBA LEASING

– Cooperation with Credit Agricole Group (CAC) A resident advisor Training courses

– Cooperation with DAI Budget of Technical Assistance Seminars

ACBA LEASINGACBA LEASING

IV.IV. Main characteristics of the dealsMain characteristics of the deals• General conditions of lease deals :

– Annual flat rate: 11 – 13%– Minimum lease period (6 months) and maximum (60

months)– Monthly payments– Imperative insurance– Registration of assets with Cadastre– Average prepayment of 25% of the cost of equipment

• Main objects of leasing:– All fixed assets and equipment preferably with long

technical amortization period– Easy recognizable, easy transferring and easy reselling

assets

ACBA LEASINGACBA LEASING

V.V. The resultsThe results• As of the end of 2005, 180 contracts have been

signed, representing:– 588 pieces of equipment– A value of 8 U$ millions

• The structure of the lease portfolio is as follow:– Agriculture: 10,8%– Industry: 32,5%– Trade and services: 56,6%

• Excellent financial results:– Net Incomes: 164518 A.DRAMS (≈ 369 US$)– Profit 2005: 122574 A. DRAMS (≈ 273 US$)– Total balance sheet: 1 982 404 A. DRAMS (≈ 4 448

US$)

ACBA LEASINGACBA LEASING