ALCA Head: Azerbaijani leasing market may grow in 2010
Azerbaijan, Baku, Oct. 27 / Trend A.Akhundov /
A growth is expected in the Azerbaijani leasing market in 2010, Azerbaijani Leasing Companies Association (ALCA) Head and Joint Leasing Director General Elchin Ahmadov said.
"The global financial crisis has not much impact on the leasing sector due to the companies' focusing on risk reduction, improvement of the portfolio, as well as the government policy on the financial sector. This year, a significant portfolio growth is not observed due to obvious reasons. There will be growth, but not as we would like to see," Ahmadov said.
He said in 2009 the development of the Azerbaijani leasing sector was at the level of 2008.
The total portfolio of leasing companies (excluding state-owned Aqrolizinq) hit about 210 million manat, while the figure was 208 million manat in 2008.
"I think that it is a normal rate for a period of crisis, at least, there was no decrease in the portfolio. Although the country observed annual growth of the portfolio twice in the pre-crisis years," he said.
Ahmadov said the arrival of new players also have a positive effect on the growth of the total portfolio of leasing companies.
"In 2010, 2-3 companies launched their activities on the leasing market. Their portfolio is growing, which will also affect the growth of the market's total portfolio," he said.
According to him, a growth in the market is also expected due the private sector's increasing needs in leasing services.
"Today, we observe a decline in the private sector's needs in leasing services. But, their need will increase with the onset of new projects," Ahmadov said.
Today, Azerbaijan observes a growing interest in leasing of motor vehicles and the companies compete with banks in this area.
"Leasing companies become more selective while selecting projects to avoid problems. They also change the direction of their activities. If before the companies paid great attention to the construction sector, now they show more interest in the processing sector and Car leasing," Ahmadov said.
Car leasing is one of the most common leasing products in the. Everything comes to that in Azerbaijan also, Ahmadov said.
Meanwhile, he said, the gaps in the legislation hamper the development of the sector.
"There are some gaps, particularly in civil and tax codes that hinder the development of the sector. The work is carried out in this direction," he said.
Despite this, today the major foreign investors show interest in the Azerbaijani leasing market.
"We hope that the arrival of new players have a positive impact on the development of the market," Ahmadov said.
According to him, yet there are no leasing companies that left the market.
"Almost all active leasing companies are members of the association, of which there are now 10. Two other companies act as observers and they also, I hope, will soon join the association," Ahmadov added.
Joint Leasing Company operates in the country since June 14, 2007 as the legal successor of the company Azerilizing. The founders of the company's are the British company Dolphin Leasing (52.3 percent) and the International Bank of Azerbaijan. Authorized capital currently stands at 700,000 manat. The first Azerbaijani leasing company Azerilizing joint venture was established in 1999.
The ALCA members are Ata Leasing, AG Leasing, Qafqaz Leasing, Joint Leasing, Uni Leasing, CredAgro, Banf of Baku, Demir Bank and Standard Leasing. The ALCA members pay 2,200 manat fees annually. The Association was established Oct. 27, 2004. The ALCA founders are Ata Leasing, Uni Leasing and Mugan Leasing.
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