Leasing in Development: Guidelines for Emerging Economies

In countries without the financial infrastructure to provide affordable credit to small businesses, the purchase of a major piece of equipment is often impossible. Leasing can meet this need by making equipment available to even the smallest businesses.

Leasing works by separating the economic use of an asset from its legal ownership – granting firms the right to use a piece of equipment in exchange for periodic payments to its owner. Because the equipment itself acts as collateral, firms without other assets or a credit history can enter into leasing contracts. Leasing is also effective in countries with weak bankruptcy laws and poor creditor rights.

This toolkit describes the legal, regulatory, and supervisory requirements for developing a leasing sector in emerging economies. It also contains practical advice on the accounting principles and tax treatment of leasing contracts.

Download the toolkit (PDF, 505KB).