Microleasing : Overcoming Equipment Financing Barriers
As their businesses grow, many microbusiness owners would like to purchase new machinery from a microfinance institution (MFI), since such equipment can hold the key to increasing production. However, MFIs are often not able or willing to lend for...
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| Format: | Brief |
| Language: | English |
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World Bank, Washington, DC
2012
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| Online Access: | http://documents.worldbank.org/curated/en/2008/12/10277994/microleasing-overcoming-equipment-financing-barriers http://hdl.handle.net/10986/10265 |
| Summary: | As their businesses grow, many
microbusiness owners would like to purchase new machinery
from a microfinance institution (MFI), since such equipment
can hold the key to increasing production. However, MFIs are
often not able or willing to lend for longer periods of
time, with grace periods that long term lending for
machinery requires. Long term financing from other sources
is usually not feasible, since banks and leasing companies
require collateral, a well-documented credit history and
financial statements. For many microbusinesses, leasing
could provide an effective alternative to taking on more
debt. This note reviews financial and operational leasing,
describes two microleasing experiences in Latin America,
identifies risks, and provides recommendations for launching
a micro-leasing program. |
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