leasing in central asia and azerbaijan

Leasing

A p r i l 2 0 0 7

in Central Asia and Azerbaijan

Contents

IntroductIon .........................................................................................3

Leasing in azerbaijan and CentraL asia:

synChronization of Leasing PoLiCy

throughout the region .........................................................6

Leasing in Azerbaijan ............................................................................8

Leasing in the Kyrgyz republic .................................................... 16

Leasing in tajikistan ............................................................................ 21

Leasing in uzbekistan ....................................................................... 25

IFC AzerbAIjAn - CentrAl AsIA leAsIng FACIlIty

AdvIsory servICes ProjeCt ................................................... 34

our contActs ...................................................................................... 35

PArtner....................................................................................................... 37

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IntroduCtIon

the leasing1 market in central Asia is poised for rapid development in 2006. over the past five years, there have been several significant positive changes in the leasing market in Azerbaijan, the Kyrgyz republic, tajikistan, and uzbekistan due to legislative and tax

changes.

Leasing, a medium-term financial instrument for the procurement of machinery, equipment, vehicles and/or properties, provides financing of fixed assets (equipment, vehicles, etc.) rather than direct capital. Leasing institutions - banks, leasing companies, insurance companies, equipment producers or suppliers, and non-bank financial institutions - purchase the equipment and then provide the equipment for a set period of time to businesses. during that period of time, the lessee makes periodic payments to the lessor at a set interest rate. At the end of the period, the equipment is transferred to the ownership of the business, depreciated and discarded or sold to a third party.

the leasing reform effort over the past five years has helped Azerbaijan and uzbekistan significantly strengthen their leasing markets, in particular due to the favorable tax climates that have created unique conditions for growth. the Parliaments in Azerbaijan and uzbekistan have significantly amended their leasing legislations to make them more attractive for both foreign and domestic investment. Additionally, amendments were made to the codes of Economic Litigation Procedures to create non-judicial repossession procedures. Also, Azerbaijan and uzbekistan have both amended their respective tax codes to remove barriers to leasing and create a level playing field with traditional bank credit. the other two central Asia countries - the Kyrgyz republic and tajikistan - have both adopted new laws on financial leasing that are equally progressive. these recent changes have made the � Thissurveycoversonlyfinancialleasingasdefinedbythecountrieslegislations.Forthepurposeofthis

documenthereinafterleasingmeansfinancialleasing.

� LEAsIng In AzErbAIjAn And cEntrAL AsIA 2007

central Asia region one of the most progressive for leasing in terms of leasing legislation and tax policy.

In Azerbaijan, the leasing market grew significantly: $56.5 million worth of leases were financed in 2006 compared to $2.5 million in 2003. the leasing portfolio as of end-2006 totaled $71 million. seven new lessors started activity in the market, and currently 12 lessors conduct leasing operations in the country.

In uzbekistan, the value of new leases tripled from $37.6 million in 2003 to $107.6 million in 2006. there are now 33 lessors (banks and leasing companies) making financial leases in uzbekistan. All of the major banks in uzbekistan have entered the market, and 10 new leasing companies have been established since 2002.

the leasing market has also started to evolve in the Kyrgyz republic and tajikistan, where further development of this market now depends on the creation of a more favorable tax environment for leasing.

In the Kyrgyz republic, three banks are financing leases, and two microleas-ing companies are reaching the country’s poorest regions. Additionally, the Financial company to support credit unions has financed more than 220 leases over last three years.

In tajikistan, the first two leasing companies were established, and the value of leases increases gradually.

Additionally, some countries have recorded multimillion-dollar cross-border leases from foreign manufacturers, banks and leasing companies.

the positive changes in legislation were due to constructive partnerships among the Parliaments, governments, local commercial banks and leasing companies, with support from international financial institutions, including the International Finance corporation, which has set up advisory services projects throughout central Asia and Azerbaijan to assist in the creation and development of leasing. these partnerships formed the foundation for dynamic leasing growth in Azerbaijan and central Asia.

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Azerbaijan and Central Asia Leasing Market Volume ($ million)

20

40

60

80

100

120

2,5 8,

735

,356

,5

1,0

0,6

0,2 1,3 1,7

1,0 1,9

0,7

37,9 43

,481

,510

7,6

0Azerbaijan Kyrgyzstan tajikistan Uzbekistan

2003 2004 2005 2006

# of Leases Financed

1,000

2,000

3,000

4,000

5,000

6,000

36 107

199 40

7

165

113

51 29 7 6 3 9

2,81

72,

810

4,07

85,

630

2003 2004 2005 2006

0Azerbaijan Kyrgyzstan tajikistan Uzbekistan


LeasIng In azerbaIjan and CentraL asIa: synChronIzatIon of LeasIng PoLICy throughout the regIon

With the support of IFc’s sEco-funded advisory services programs in central Asia and Azerbaijan (launched in 2001 and 2003, respectively), the countries in the region have steadily improved their legal and tax frameworks. one result has been the unification of national legislations – including standardization of definitions, regulations and obligations between parties – to support the development of regional investment in leasing. Amendments have been adopted to the Law on Leasing, civil code and tax code in Azerbaijan and uzbekistan, and new laws on leasing and amendments to the tax code were adopted in the Kyrgyz republic and tajikistan. this work significantly unified the legislations and expanded access to lease finance for entrepreneurs and businesses across the region.

Unified Elements of the Leasing Legislation

1. definition of Leasing

unification of the definition of leasing throughout the region is based on the following principles:

Mandatory participation of three parties to the lease: lessor, lessee, and supplier;

Purchase of the leased asset specifically for transfer through a lease; the lease agreement must meet one of the several stated require-

ments (classifications), which are a combination of classifications for financial leases from IAs 17 and gAAP FAs 13; (classifications are not included in the tajik Law on Leasing, but included in the tax code).

obligatory use of the leased asset for commercial purposes (in Azerbaijan, leased assets can be used for consumer purposes as well).

Additionally, uzbekistan has established a minimum lease term of one year.

2. Civil regulation Leasing is defined as a type of “property hire” and thus, is governed

by the overall principles of “property hire.” For example, the basis for early termination of a property hire agreement is also the basis for the early termination of a lease agreement;

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Leasing is defined as an investment activity based upon the purchase of a leased asset by a lessor using either debt and/or equity funds and the further transfer of the leased asset to a lessee on the basis of a lease agreement.

3. Legislative advantages for leasing that correspond through the region:

non-bank financial institutions are not required to obtain a license to conduct leases;

non-bank financial institutions are not restricted by obligatory capital requirements for leasing;

there is no obligatory registration of the lease agreement; and, Leasing as an activity is not supervised by government structures

unless the lease is financed by an institution already under supervision, such as a bank.

4. accounting of leases the Kyrgyz republic and tajikistan have adopted International

Financial reporting standards (IFrs); In Azerbaijan and uzbekistan, national Accounting standards are

applied; however, banks also prepare their annual financial reports according to IFrs.

uzbekistan’s national Accounting standard for leasing is very similar to International Accounting standard 17 “Leases.”

5. taxation and customs regulation of leasing operations

the tax codes of the central Asian countries and Azerbaijan use classifica-tions criteria, which are a combination of classifications for financial leases from IAs 17 and gAAP FAs 13. the tax codes only impact leases in which the asset leased is a fixed asset.

In each country, financial leasing is at least on the same taxation “playing field” as bank credit; and in some countries, leasing is a more effective instrument from a tax point of view. For example:

In the Kyrgyz republic and tajikistan, VAt is not levied on the interest portion of the lease payment, and is offset for equipment purchase;

In Azerbaijan and uzbekistan, lease payments (rentals) are exempt from VAt;

In uzbekistan, equipment that is imported for leasing is exempt from VAt on import; leased asset is exempt from property tax; and lessors’ interest income is exempt from income tax.


LeasIng In azerbaIjan

an overvIew of the Market

after a decade of stagnation in the leasing sector of the country, significant positive changes have been made in the leasing legislation. the introduction of a more favorable tax regime, proper civil regulation and an increased level of public awareness have

revived the market. new lessors were established to satisfy the increasing demand for lease financing.

Common trends

the market has immediately reacted to the improvements in the leasing environment. As a result of reforms in leasing legislation, the number of leasing companies has increased from 3 in 2003 to 12 at the end of 2006.

the consolidated leasing portfolio grew from $2.1 million in 2003 to $71 million in 2006.

Leasing Market Growth ($ million)

10

20

30

40

50

60

0

2,5

8,7

35,3

56,5

2003 2004 2005 2006

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the consolidated outstanding portfolio of the leasing sector as of december 31, 2006 includes 787 deals. the increase in number of lease contracts concluded since 2003 is more than 10 times.

Table 1. New Leases and Leasing Portfolio

2002 2003 2004 2005 2006

Number of lessors at end of year 3 3 7 11 12

New leases during a year: - number - value of assets leased, $ million

36 2.5

107 8.7

199 35.3

407 56.5

Leasing portfolio at end of year: - number of active leases - value, $ million

74 2.1

181 7.2

365 34

787 71

Delinquent leases (at end of year) - number - value, $ million

0 0 0 3

0.15

Table 2. Industry Distribution of Leases, $ million

2004 2005 2006

Trade - 0.7 3.4

Agriculture 0.2 4.2 0.6

Manufacturing - 0.7 10.2

Construction 4.2 9.5 11.9

Transport 2.0 12.7 11.3

Financial Sector - 1.8 3.4

Consumer - - 2.8

Services and Tourism 0.7 0.7 1.1

Food 1.0 1.4 3.4

Textile - - 5.1

Health 0.1 1.1 1.1

Telecommunications - - 0.6

Chemical Industry 0.3 - -

Real Estate 0.1 - -

Other 0.3 2.5 1.7

Total �.� ��.� ��.�

10 LEAsIng In AzErbAIjAn And cEntrAL AsIA 2007

source of funding for leasing

Leasing companies generally finance their operations with their own equity/funding or bank loans.

Table �. Capitalization of leasing companies (at end of the year)

2003 2004 2005 2006

Number of companies 3 7 11 12

Equity ($ million) 0.7 2.4 3.5 4.5

Leasing portfolio ($ million) 2.1 7.2 34.0 71.0

Distribution of leases throughout the country

the distribution of leases throughout the regions of Azerbaijan is unequal and depends on the level of business activity in the regions. In 2006, the majority of leases were made in baku. Mostly, leasing companies provide services in the regions where they have branches or representative offices of parent banks.

Regional Distribution of Leased Assets (by number of leases)

Absheron 82% Aran 5% sheki - zagatala 4% gyandja - gazah 3% lenkoran 2% guba - Hachmaz 2% gorniy shervan 1% nahichevan 1%

Basic Lease Terms and Conditions

the following average terms and conditions are offered by Azerbaijani lessors:

term: general guideline for leasing companies is for lease terms from 12 months to 96 months. However, the maximum term for many leases is fixed at 36 months.

amount: the internal policies for many companies set forth the minimum lease amount to be not less than $10,000. the maximum net investments in leases have also been determined not to exceed $1,000,000.

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grace Period: Lessors usually do not extend a grace period (interest-only period) of longer than 6 months to any leases made.

Payment: Lease payments are structured based on the capacity of the business and useful economic life of the asset. the payment schedule (annuity or reducing balance) is proposed to allow for monthly, quarterly, or semi-annual payments.

companies do not accept lease proposals requiring a large, lump-sum payment scheduled at the end of the lease term (i.e., balloon payment).

down Payment: Lessors require an average down payment of 20%. However, a higher down payment may be required for individual leases, to exceed 50% of the leased asset value.

interest: Interest rates vary from 15% to 26% and are established for each individual lease.

origination fee: the general practice is that lessors charge a 1% up - front fee of the total cost of the project.

insurance: Insurance of lease assets and any additional security is mandatory for all leases made.

LegaL fraMework for LeasIng In azerbaIjan

Adopted september 1, 2000, the civil code of Azerbaijan is the foundation of civil law in the country. the civil code defines legal terms and regulates the property and contractual rights and obligations of participants involved in commercial transactions.

the provisions of the civil code are applied to legal entities, property and property rights, rules governing enforcement of obligations, and validity and termination of contracts. the civil code also sets forth rules governing contracts and agreements such as sale and purchase, loan, commission, transportation, storage and supply, and leasing.

Leasing operations are regulated by provisions of chapter 38 (“Leasing”) of the civil code adopted in 2000.

In 2003, 18 amendments concerning leasing operations were made to the civil code by Parliament. the amendments greatly improved upon the “Law on Leasing services” from 1994, which was inherently flawed due to its ambiguity and contradictory nature.

civil code clearly defines the rights and responsibilities of the parties, repossession procedures and essential conditions of a lease agreement.


the current provisions of the Azerbaijan civil code regulating leasing compares favorably with internationally adopted legislation.

tax fraMework for LeasIng In azerbaIjan

In Azerbaijan, the issues of taxation are regulated by the tax code. the tax code was adopted in january 2001 and establishes the tax system of the country, general principles of taxation, the rights and responsibilities of taxpayers and state tax authorities, liabilities for tax law violations and the procedures for unlawful actions of tax agencies and officials.

the tax code states that any one of the following conditions constitutes a financial lease agreement:

At the end of a lease agreement, the ownership title of the leased asset is transferred to the lessee or the lessee has the right to purchase a leased asset at a reasonable market price negotiated beforehand, or

the term of the lease agreement is longer than 75% of the economic life of a leased asset, or

the depreciated value of a leased asset at the end of the agreement is not more than 20% of its original value, or

the total amount of lease payments is not less than 90% of the market value of a leased asset stated at the beginning of the period, or

A leased asset is manufactured for a lessee by special order and after expiry of a lease agreement can be used exclusively by a lessee.

the Parliament of Azerbaijan passed amendments, which were retroactively enforced from january 1, 2004, to the country’s legislation to stimulate development of the leasing sector in the country.

the two major changes to the tax code provide the following tax advantages for leasing:

1. Leasing operations are exempt from VAt, on the basis that leasing is now defined as a “financial service.” As a result, leasing and commercial bank lending are now treated equally under the tax law.

2. Lessee can apply accelerated depreciation to leased assets, reducing its taxable income (until january 1, 2006).

these amendments to the tax code cannot be viewed as positive unless the tax regime allows for import-free VAt of leased assets. therefore, a corresponding decree of the cabinet of Ministers (decree #11) was issued

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january 31, 2005 to introduce VAt-free import of leased assets. the decree substantially expanded a limited scope of lease financing and provided greater financial incentives for using leasing as an important step in building the leasing market in Azerbaijan.

to improve the taxation regime further, the Leasing Association and IFc’s Azerbaijan Leasing development Project successfully lobbied 3 major amendments to the country’s tax code, which were adopted by Presidential decree december 16, 2005 and enforced starting january 1, 2006.

the amendments to the tax code were aimed at improving leasing taxation, and resulted in:

Abolishment of the withholding tax of 10% on lease payments made under domestic leases

reduction of the tax burden on cross-border leases by replacing the 4% withholding tax on total lease payments with a 10% tax imposed exclusively on the interest portion of the payment

clarification of the language of the tax code in the part related to leasing transactions. thus the tax code now clearly states that lease payments should consist of a principal and interest portion.

In line with other industry-positive changes, the previously adopted tax privilege for leasing-accelerated depreciation was abolished.

CustoMs reguLatIon

Import and export of goods in Azerbaijan is regulated by the customs code adopted in 1997. However, customs tariffs are regulated by the Law on customs tariffs adopted in 1995. customs tariffs range from 0.5% to 15% of the customs value of the property, and are levied for imported goods. the actual rate levied depends upon the type of property and country of origin.

the present classification of customs tariffs is determined by the decree of the cabinet of Ministers on “the Amount and rates of customs duties and Fees for Export-Import operations in the Azerbaijan republic” dated April 12, 2001 (decree #80).

on january 31, 2005, decree #12 of the cabinet of Ministers revised the existing customs tariffs and introduced a list of customs-duties-free import of leased assets.

Imported goods are also levied an 18% VAt, which is imposed on both the customs value and the amount of duties paid. As stated in the section “Leasing taxation,” decree #11 of the cabinet of Ministers dated january 31,

1� LEAsIng In AzErbAIjAn And cEntrAL AsIA 2007

2005 approved a list of leased assets exempt from import value-added tax. According to the decree, the import VAt concession is mostly granted to agricultural inputs, processing and construction equipment, technological and engineering machinery.

PersPeCtIves

the dynamics of the leasing market and an analysis of the key economic in-dicators point to tremendous potential of the industry. by relying on official import stats and investments into fixed assets, even the most conservative projections determine a leasing market of Azerbaijan worth $500 million in the near future. the conservative projections for the volumes of lease financing from 2007 to 2008 is estimated at $150 - $200 million.

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LEssors in AzErBAijAn Ag leAsIng contact Information: 16 gulle str., Icheri sheher, baku, Azerbaijan, tel: (994 12) 437 19 31 / 32 Fax: (994 12) 437 19 33 contact person: Azar Mammadov, E-mail: [email protected] Web site: www.agleasing.com

AzerIlIzIngcontact Information: 65 Fizuli str., baku, Azerbaijan tel: (994 12) 447 52 26 Fax (994 12) 447 52 27 contact Person: jeyhun nagiyev E-mail: [email protected]

AtAlIzIngcontact Information: 9 s.rustam str.2-nd floor, baku Azerbaijan tel: (+994 12) 449 91 61, 449 85 95 Fax: (+994 12) 449 85 65 contact person: Yusif Muslumov E-mail: [email protected] Web site: www.atalizinq.com

AzlIlIzIngcontact Information: 1, b.sardorova str., baku, Azerbaijan tel.: (+994 12) 492 61 48 Fax: (+994 12) 497 24 62 contact person: Mirvafa Manafov E-mail: [email protected]

debUt bAnKcontact Information: 16 babek ave, tel: (+994 12) 496 45 51 Fax: (+994 12) 496 45 60 contact person: Elchin nuraliyev E-mail: [email protected] Web site: www.debutbank.az

MUgAn leAsIng contact Information: 4, 28 May str., baku, Azerbaijan tel.: (+994 12) 498 34 11, 498 35 11 Fax: (+994 12) 498 31 77 contact person: Vugar Veliev E-mail: [email protected]

gUnAy leAsIng contact Information: 4/6 rasul-rza str., baku, Azerbaijan tel: (+994 12) 498 04 55, 493 74 95, Fax: (+994 12) 498 13 60 contact person: suada Huseynova E-mail: [email protected]

slC AzerlIzIng contact Information: 108 nobel ave. baku Azerbaijan tel: (+994 12) 447 28 17 Fax: (+994 12) 4472814 contact person:Ahliyat Aliyev E-mail: [email protected]

PArex leAsIng And FACtorIngcontact Information: 44, j.jabbarli str., caspian Plaza 5 floor tel: (+994 12) 598 09 31, 436 81 63/64 Fax: (+994 12) 436 81-62 contact person: rashad Ismaylov E-mail: [email protected]

texnIKA lIzIngcontact Information: 1107 Ataturk aven., baku, Azerbaijan tel.: (+994 12) 493 87 11 Fax: (+994 12) 440 29 61 contact person: zeynal baxshaliyev E-mail: [email protected]

UnI leAsIngcontact Information: 92 nizami str., baku, Azerbaijan tel: (+994 12) 498 81 68 Fax: (+994 12) 498 91 29 contact person: Kazim salimov E-mail: [email protected] Web site: www.unileasing.az

UlUxAnlI ojsCcontact Information: 16 babek aven., baku, Azerbaijan, tel.: (+994 12) 496 45 56 Fax: (+994 12) 463 09 11 contact person: rizvan Mammadov E-mail: [email protected]


LeasIng In the kyrgyz rePubLIC


the Kyrgyz republic has taken several steps to develop leasing as a financial instrument for small and medium-sized business. on july 23 2002, the President signed the Law on Financial Leasing.

In the Kyrgyz republic, two major banks, (Kyrgyz Investment and credit bank (KIcb) and tolubay bank) currently finance leases, and two microleasing companies reach the country’s poorest regions. Additionally, the Financial company to support credit unions has financed 10 leases in 2006.

three banks (demir Kyrgyz International bank, jscb Kyrgyzstan and Energobank) and three financial institutions (Kyrgyz Agricultural Finance corporation, Lease-Mortgage company and financial fund “bai-tushum”) are planning to start providing leasing products in 2007.

Common trends

In 2006, the above mentioned institutions financed 29 leases for a total value of $1.27 million. one of the most important factors hindering the growth of leasing in 2006 was the tax system of leasing in the country, especially the VAt issue. In addition, local banks have a lack of long-term financial resources to provide leasing.

the Financial company to support credit unions has enough financial resources to increase its leasing portfolio, but regulations of the national bank limiting the equity of credit unions restrict them to carry out costly leases.

two microleasing companies, which started their leasing operations through grants received from the European commission Program to support sMEs in the Kyrgyz republic, now provide leases from their own funds.

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Table 1. Leasing Portfolio2

2003 2004 2005 2006

Number of lessors by the end of the year3 5 5 6 6

New leases during the year: - number - value of assets leased, $‘000

165 977

113 554

51

172

29

1,270

Leasing portfolio by the end of the year: - number of active leases - value, $’000

No data No data

162 549

178

1,477

Delinquent leases (by the end of the year) - number - value, $’000

- - 5

0.7

2

0.05

Lessors in the Kyrgyz Republic � ($ thousand)

0

130

Finance Company to

support Credit Unions

200

400

600

800

1000

1200

Inexim bank leasing Maalymat

Kyrgyz Investment and Credit

bank

2003 2004 2005 2006

101 13

615

4

522

130

300

300

25 23 17 16

1100

Leased assets

Production equipment dominates among leased assets in 2006. However, this is due to one large leasing deal closed by KIcb in 2006 and can’t be an indicator of overall leasing industry performance. As per a number of leases, the most common leased assets were trade equipment (42%), agricultural machinery (28%), and equipment for food processing (14%).

� Leasingportfolioreflectsdataoforganizationsthatprovidedinformationduringthesurvey.� Numberoflessorsincludesbothactiveandnon-activeorganizationsthatusedtohaveexperiencein

providingleasing.


Table 2. Leased assets

Types of leased assets2005 2006

Number Value, $’000 Number Value, $’000

Agricultural machinery 7 111.5 8 152.9

Office equipment 32 29.1 3 2.0

Production equipment 4 20.3 1 1,099.8

Food processing equipment 2 4.5 4 5.2

Wood processing equipment 1 0.9 0 0

Trade equipment 4 4.7 12 8.8

Other 1 1.1 1 0.8

Lease terms and cost of leased equipment

Most leases financed in Kyrgyzstan are for up to 3 years (excluding KIcb, which has a lease deal for 6 years). this is because lessors prefer to lease an asset for a shorter period depending on its liquidity and depreciation, as well as due to the lack of long-term funding.

the average lease size in 2006 was equivalent to $6,000 ($3,380 in 2005). this amount substantially varies depending on the lessor. For example, KIcb leased an asset worth over $1 million whereas Leasing-Maalymat provides microleasing services with the average cost of asset equivalent to $900. Financial company to support credit unions closed leasing deals with the average value of $15,400.

sources of funding for leasing

In 2006, leasing transactions were financed through the lessors own equity and loans of founders.

interest rates

Annual interest rates for leases nominated in us dollars are 14-20% pa. As for the deals in local currency, annual interest rates are 20-25% pa.

Factors hindering growth of leasing in the Kyrgyz republic

Even though Kyrgyz republic adopted progressive legislation to support the growth of leasing, several barriers have hindered growth. Most importantly,

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the demand for leasing has been stalled in Kyrgyz republic due to the VAt issue. Assets imported into the country for leasing are levied VAt whereas fixed assets imported by commercial entities for their own manufacturing purposes are exempt from import VAt

currently, a new tax code is under development, and it is expected that when it takes effect in 2006, there will be a more favorable tax regime for leasing.

PersPeCtIves

solving the above-mentioned problem will provide significant stimulus for leasing to develop in Kyrgyz republic. sME activity is growing rapidly and needs investment. the greatest demand is for equipment costing less than $70,000 in the following sectors: production, transport, services, food processing, trade, construction, and woodworking equipment.

LegaL fraMework for LeasIng In the kyrgyz rePubLIC

Leasing is governed in Kyrgyz republic on the basis of the second part of the civil code, adopted january 5, 1998, and the Law on Financial rent (Leasing), adopted july 23, 2002.

the civil code defines leasing as a form of property hire (rent) and addresses overall concepts to govern leasing, such as the lease agreement, the leased asset, and the rights and obligations of the parties to the lease.

Leasing in Kyrgyz republic is not licensed, though institutions that are licensed such as financial-credit institutions (banks and microfinance institutions) require additional noting in their bank licenses or certificates.

the Kyrgyz republic has introduced third party commercial arbitration which can be used for repossession of leased assets due to breach of contract. otherwise, repossession is conducted, if contested, through court proceedings.

tax fraMework for LeasIng In the kyrgyz rePubLIC

the tax code, in effect since june 1, 1996, is the major legislative act that governs taxation in Kyrgyz republic. taxation for leasing is based on criteria


and classifications determined by IAs17. Additionally, all finance leases must be at least 12 months in duration. the tax framework for leasing dictates:

VAt is levied solely on the cost of the leased asset, and not on the interest payment. Lessors have the right to offset VAt based on the amount stated in the invoice at the transfer of the asset to the lessee;

Assets imported into Kyrgyz republic for lease are levied VAt, whereas fixed assets imported by commercial entities for their own manufacturing purposes are exempt from import VAt;

Lessors’ interest income from leases is taxed at 10% rate at the source of income (lessee).

LEssors in ThE Kyrgyz rEpUBLiCtolUbAy bAnK

247, toktogul str., bishkek city tel.: (+996 3656) 24-02-46

contact person: Andrey dmitriev E-mail: [email protected],

[email protected]

leAsIng MAAlyMAt301, Frunze street, talas city

tel.: (+996 3422) 52-170 contact person: nurlan Atahanov

E-mail: [email protected]

Kyrgyz InvestMent And CredIt bAnK 115A, Ibraimov street, bishkek city

tel.: (+996 312) 69-05-55 Fax: (+996 312) 69-05-60

E-mail: [email protected] contact person: Erina Kadiralieva

InexIM bAnK 57, Kalyka Akieva street, bishkek city

tel.: (+996 312) 65-06-10 Fax: (+996 312) 65-06-54

E-mail: [email protected] Web-site: www.ineximbank.com contact person: ulan shamkeev

FInAnCe CoMPAny to sUPPort CredIt UnIons219, chuy Avenue, bishkek city

tel.: (+996 312) 21-95-66, 21-95-67, 21-97- 26 Fax: (+996 312) 61-09-98 E-mail: [email protected]

contact person: Melis umarhodjaev

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LeasIng In tajIkIstan


Currently, there is a large demand in equipment leasing that is con-firmed by the fact that manufacturers in tajikistan are in dire need of new equipment to replace existing production lines. Aging equip-ment prevents companies from operating at full capacity and meet-

ing demand. However, local businesses – both large and small – are unable to replace this equipment due to limited working and investment capital to purchase new equipment, and limited access to finance.

neither the manufacturing nor agricultural sectors can continue operating under existing conditions and are looking for new mechanisms and business processes. Leasing is one solution to this problem and could provide a necessary stimulus for growth.

Common trends

Leasing operations in tajikistan started in 2003 when the Law on Leasing was enacted. commercial banks were the only lessors until 2005. After con-ducting several successful leasing operations, tojiksodirotbank established the leasing company in 2005.

In 2006, a second leasing company was registered with foreign capital participation, but did not make leases in 2006. banks weren’t too active in developing this type of service.

on a positive note, the main banks began to train their staff on providing leasing services and adapting internal lease policies and procedures to increase leasing operation efficiency. It is necessary to mention that the demand for leasing service is high, but due to a lack of long-term money in credit institutions, the projects were not financed.


In 2006, there were three lessors operating in tajikistan – tajiksodirotbank, nahust Leasing and the Microcredit deposit organization.

nine deals with total value of leased assets of $649,600 were conducted by abovementioned lessors in 2006 as compared with three leases totaling $1.9 million in 2005.

Table 1. Leased Assets

Types of Assets2005 2006

Number of leases Value, $’000 Number of

leases Value, $’000

Equipment for light industry 1 100.0

Food processing 3 417.1

Trade 1 2.6

Printing 1 1,500.0 1 20.0

Medical 1 29.0

Real estate 1 70.0

Agricultural 1 370.0 - -

Construction 1 60.0 - -

Other 1 10.0

Leasing portfolio as of end-2006 was $2.3 million.

Lessors implement leasing operations using the same interest rates as for commercial loans. Interest rates for dollar nominated leases made in 2006 were 25.5% pa. whereas those in national currency were 36% pa. the latter are short-term microleasing transactions conducted by a microfinance institution.

there are no exact statistics on cross-border leases in 2006. the estimated amount of such leases totals $23 million ($10 million in 2005). they have longer terms than domestic leases and lower interest rates.

Although the demand for lease financing remains high, the local financial institutions still lack long-term and low-cost capital to match the terms of foreign lessors’ lease contracts. thus, liquidity concerns do not allow the banks to utilize their short-term resources to finance medium-term lease contracts. banks have recently started implementing new funds and liquidity management tools.

Another important reason for the lack of growth in domestic leasing is the tax treatment of leases. unlike in the other central Asian countries, there are no tax incentives for leasing in tajikistan.

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Also, there is a large demand for short-term funding in the country. banks prefer traditional short-term loans, viewing it as less risky and less expensive.

PersPeCtIves

Liberalization of the tajik tax system can serve as a stimulus for the increase in long-term funding. It will allow companies to attract more funds to modernize the existing production capacity and create new capacity. currently, the greatest demand is for agricultural and agricultural processing equipment, followed by equipment for light manufacturing and food manufacturing. For this purpose one of the biggest local banks is in the process of establishing a leasing company with the main focus on leasing of agriculture equipment. Microleasing of trade equipment also has great potential in tajikistan.

LegaL fraMework for LeasIng In tajIkIstan

Leasing in tajikistan is governed by the civil code and the Law on Leasing, signed by the President April 21, 2003. the civil code has instituted several norms that are specific to leasing and supersede the general norms applied to rent relationships, such as repossession, risk relationships among the three parties, the lease agreement, and the transfer of the leased asset. the Law on Leasing builds on these definitions and provides more detailed roles and responsibilities for all three parties.

It is important to note that in contrast with the other central Asian coun-tries, this definition does not include obligatory classifications based on IFrs. For the purposes of civil regulations, leasing therefore is not restricted by a lease term, the useful life of the leased asset, or the obligatory transfer of ownership to the lessee at the end of the lease agreement. However, this definition contains other obligatory aspects, such as participation of three parties (lessor, lessee, supplier) to the lease, special acquisition by the les-sor of the property for transfer through a lease, and the mandatory usage of the leased asset for commercial purposes. It is important to note that the legislation does not have a minimum lease period.

the republic of tajikistan acceded to the unIdroIt convention on International Financial Leasing April 19, 2004. In cross-border leases, the unIdroIt convention takes precedence over tajikistan law and regulation. According to the unIdroIt convention, cross-border leases are operations in which a lessor and a lessee are located in different countries.


tax fraMework for LeasIng In tajIkIstan

the new tajikistan tax code was enacted january 1, 2005. the tax framework for leasing dictates:

VAt is levied solely on the cost of the leased asset, and not on the interest payment;

Production equipment imported through cross-border leases is exempt from VAt on import;

Interest paid as a part of lease payments to local lessors is not taxed at the source of income (lessee). It is included in the gross income of the lessor and taxed at 25% income tax after all deductions, in accordance with the tax code;

Interest income tax on cross-border leases to foreign lessors is withheld at the source of income at a 12% rate;

Lessees can apply up to two times accelerated depreciation on fixed assets set in operation after january 1, 2005.

LEssors in TAjiKisTAnAgroInvestbAnK

21, s. sherozi street, dushanbe tel.: (+992 37) 236-50-70 Fax: (+992 37) 236-95-89

contact person: djalil tavakalov E-mail: [email protected]

Web-site: www.agroinvestbank.tj

tojIKsodIrotbAnK47a, behzod street, dushanbe

tel.: (+992 40) 600-40-00, (37) 221-32-19, 221-47-38 Fax: (+992 37) 221-47-38

contact person: zair tairov E-mail: [email protected]

Web-site: www.sodirotbonk.tj

FIrst MICroFInAnCe bAnK105, rudaki avenue, dushanbe

tel.: (+ 992 37) 224-93-10, 224-93-14 Fax: (+992 37) 224 93 09

contact person: Hudoberdi zuurbekov

nAHUst leAsIng47a, behzod street, dushanbe

tel.: (+992 44) 600 40 59 Fax: (+992 37) 221 47 38

contact person: ravshan sativaldiev

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LeasIng In uzbekIstan


until 2002, almost all leasing companies in uzbekistan were established under separate government resolutions, which granted individual tax preferences. Presidential decree #3122 “on Measures for the Future development of Leasing,” enacted August 28, 2002,

created a strong basis for the sector’s growth. this decree expanded all of the tax benefits available to credit to leasing, thus removing the tax barriers to its growth. the decree was then followed with more than 40 legislative amendments to the civil code, tax code, civil Litigations code, and the Laws on Leasing and customs tariffs between 2002 and 2003. With this substantial overhaul, the legislative framework for leasing in uzbekistan is now progressive and provides significant incentive for growth in the sector.

Further stimuli to leasing were provided by an April 2004 government resolution, which gave lessees the ability to use accelerated depreciation for tax purposes to amortize the leased asset. this additional tax advantage for lessees will further assist small businesses to acquire new equipment and technology for leasing. the resolution also simplified procedures for registering and accounting for leased vehicles, and reduced the fees levied to use notary writ to repossess leased assets.

In April 2006, leasing was provided with an additional incentive – income from leasing transactions is exempt from income tax until 2009.

Common trends

In 2006, the leasing sector continued growing, totaling $107.6 million new leases compared with $81.5 million in 2005. While data on cross-border leases in 2006 is not available for the last two years, domestic leasing penetration (share of assets acquired through leasing in total capital investment) increased from 3.72% in 2005 to 4.22% in 2006.

the market share of uzselkhozmashleasing (a state-owned leasing com-


pany financed from a special Fund at the Ministry of Finance to stimulate replacement and improvement in agricultural equipment) is gradually de-clining, though it still remains at a relatively high level (38% in 2006 down from 93% in 2001).

this decline is due to the increase in bank lease operations, emergence of new leasing companies, and expansion of business by leasing companies established before amendments in the legislation. In 2002, there were only 13 lessors; at end-2006 there were 33. Eighteen of these are banks, 14 are leasing companies, and 3 are microfinance institutions.

Total lease value, $ million

0

20

40

60

80

100

120

34,9

25,5

27,9

36,6

40,5

6,5

12,4 15

,5

44,9

67,1

Uzselkhozmashleasing other lessors

2002 2003 2004 2005 2006

IFc’s leasing market surveys show that companies engaged in other activities also conduct leasing transactions. this survey includes data on lessors that conduct leases on regular basis and were easy to access.

Table 1. Leasing Market Players Breakdown, $ million

2002 2003 2004 2005 2006

Leasing companies 39.2 30.5 33.1 59.3 57.3

Banks 1.7 6.7 10.2 19.2 46.4

Others 0.5 0.7 0.1 3.0 3.9

Total �1.� ��.� ��.� �1.� 10�.�

the share of banks in leasing sector continues growing. In 2006 banks conducted 2.5 times more leases than in 2005. their leasing portfolio doubled and totaled $55.9 million as of end-2006. nevertheless, the share of leases in banks’ total exposure to sMEs remains small (6.1% as of end-2206).

In 2006, leasing companies’ portfolio grew by 40% and totaled $144 million.

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Table 2. New Leases and Leasing Portfolio

2002 2003 2004 2005 2006

Number of lessors at end of year 14 21 23 28 33

New leases during a year: - number - value of assets leased, $ million

2621 41.4

2817 37.9

2810 43.4

4078 81.5

5630 107.6

Leasing portfolio at end of year: - number of active leases - value, $ million

7022 60.1

8985 87.8

13068 133.9

17693 201.0

Delinquent leases (at end of year) - number - value, $ million

No data

170 1.3

36 2.0

279 2.0

No data

during the last two years, lessors exercised their repossession rights more often than in previous years. Mostly, asset repossessions and debt transfers occurred for agricultural machinery.

Table �. Leased Assets

Types of assets 2004 2005 2006

Number of leases

Value, $ million

Number of leases

Value, $ million

Number of leases

Value, $ million

Equipment for light industry 26 540 4 2,152 38 5,626

Food processing equipment 46 3,438 34 4,003 27 2,624

Printing 5 940 9 3,301 30 3,619

Construction 16 1,178 62 10,596 49 5,924

Other manufacturing equipment 30 866 53 2,824 5 181

Trade 22 27 125 169 10 575

Medical 10 243 10 947 27 889

Computers and office equipment 52 756 36 1,307 28 953

Agricultural machinery 2,493 30,527 3,422 4,6157 5,022 61,337

Trucks 2 221 10 888 24 1,700

Passenger vehicles 80 1,552 242 5,489 274 7,019

Real estate 16 2,702 38 2,352 49 8,917

Other 12 426 33 1,356 47 8,222

Total 2,�10 ��,�1� �,0�� 1,��1 �,��0 10�,��


Leased assets

Agricultural equipment continues to dominate the leasing industry in uzbekistan. In 2005, 57% of leases were for agricultural machinery as in 2005 (70% in 2004). this is, of course, mainly due to uzselkhozmashleasing; however, even excluding uzselkhozmashleasing, agricultural machinery accounted for 32% of the market (21% in 2005). Analyzing the market without uzselkhozmashleasing’s portfolio, manufacturing equipment composes 27% of the total lease portfolio (51% in 2005). In quantitative terms, most leases are for agricultural machinery and vehicles.

Leased assets (excluding Uzselkhozmashleasing)

agricultural machinery 32% manufacturing equipment 27% other 14% real estate 13% passenger vehicles 10% trucks 3% computer & office equipment 1% medical equipment 1%

construction 9% light industry 8% printing 5% food production 4% other 0,3%

Lease term and leased assets value

In uzbekistan, the average lease term is up to three years (minus uzselkhozmashleasing, which offers 7-year terms for 80% of its transactions). this can be explained by the high interest rates charged by several lessors, encouraging clients to make the repayment as soon as possible to pay less interest, and also the lack of long-term financing available in uzbekistan.

the average lease size in 2006 was $19,000 ($15,000 and $20,000 respective-ly in 2004 and 2005); however, the average lease size depends significantly upon the lessor financing the lease. Minitechinvest Leasing, Karakalpakstan business Incubator and the Association of Karakalpak business Women fi-nance micro leases, whereas uzbek Leasing International, Kurilish Leasing, Asaka bank, u-t bank and uzKdbank and credit standard bank have aver-age transaction sizes of more than $170,000.

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sources of finance

Most commercial banks finance leases directly. only 4 of 13 leasing companies operating in 2006 were affiliated with banks.

Leasing companies finance their operations from shareholder loans and their own funds (with the exception of uzselkhozmashleasing, which is financed from a special fund under the Ministry of Finance). capitalization of leasing companies remains on a low level.

PersPeCtIves

IFc’s research demonstrates that leasing in uzbekistan has great potential. the greatest demand is for agricultural and agricultural processing equip-ment, followed by equipment for light manufacturing and food manufac-turing. retail trade equipment, which also has potential in uzbekistan, is a largely untouched market.

the progressive climate for leasing combined with the liberalization of the currency market in uzbekistan has created the foundation for the further development of leasing. nevertheless, this growth cannot be fully realized without new external funding sources, or without internal restructuring by uzbekistan lessors to update their marketing, credit analysis and monitoring policies to meet the requirements of growing competition in the market.

LegaL fraMework for LeasIng In uzbekIstan

Leasing is governed by the civil code, which was adopted in August 1996 and the Law on Leasing, adopted in April 1999. both civil code and the Law on Leasing were amended in december 2002 to create a more progres-sive legislative framework for leasing. Also in August 2003, the uzbekistan Parliament adopted amendments to the code for Economic Litigation Procedures to simplify and strengthen repossession procedures for leased assets.

uzbekistan has signed and ratified the unIdroIt convention, which governs international leasing and came into effect in uzbekistan February 1, 2001. the unIdroIt convention serves as the governing basis for international leasing operations and takes precedence over uzbekistan law and regulation only in those cases in which the lessor and the lessee are located in separate countries.

�0 LEAsIng In AzErbAIjAn And cEntrAL AsIA 2007

tax fraMework for LeasIng In uzbekIstan

In uzbekistan, leasing is on the same taxation “playing field” as bank credit; from a tax point of view, leasing is a more effective instrument.

taxation for leasing is based on the same criteria and classifications as stipulated in the Law on Leasing. Finance lease is based on classifications determined by IAs 17. Additionally, all finance leases must be at least 12 months in duration. the tax advantages of leasing are as follows:

Lease payments (rentals) are exempt from VAt (in uzbekistan, there is no offset of VAt being a part of fixed assets price at acquisition);

Manufacturing equipment imported into uzbekistan for lease is exempt from VAt on import and customs duty (based on the list approved by the government);

Lessor’s income is exempt from income tax until 2009; When computing the taxable income, the lessee is allowed to

deduct:- the interest paid on a lease from his gross income;- the whole amount of accrued depreciation including accelerated

depreciation on the leased assets; Lessees are not levied property tax on leased assets for the full term

of the lease.

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LEssors in UzBEKisTAnAsIA-eUroPeAn trUst CoMPAny4, Musa djalil Passage, tashkent, tel.: (+998 71) 360 74 39, 360 94 28 Fax: (+998 71) 360 73 46 contact person: z. Muhtarova E-mail: [email protected]

AssoCIAtIon oF KArAKAlPAK bUsIness WoMen21, Musaev street, nukus tel.: (+998 761) 223 97 33, 223 02 22 Fax: (+998 761) 223 97 33 contact person: shiyrin Palimova E-mail: [email protected]

bArAKA1A, A. Khodjaev street, tashkent, tel.: (+998 71) 138 69 23, 138 69 33 Fax: (+998 71) 138 69 13 contact person: zahro ruzieva E-mail: [email protected]

bUsIness leAsIng6, Mahmud tarobiy street, tashkent tel.: (+998 71) 120 30 40, 120 44 93 Fax: (+998 71) 120 44 93 contact person: gleb chumichev E-mail: [email protected]

zAMIn Invest2, A.Kayumov street, 2-floor, tashkent tel.: (+998 71) 120 63 63, 134 33 06 Fax: (+998 71) 134 33 06 contact person: ulugbek Iskandarov E-mail: [email protected]

KArAKAlPAKstAn bUsIness InCUbAtor112A, A.temur street, tashkent tel.: (+998 761) 222 19 02, 222 03 08 Fax: (+998 761) 222 03 08 contact person: Mir-Pulat babashev E-mail: [email protected]

KUrIlIsH - leAsIng 29A, oltin Vodiy street, tashkent tel.: (+998 71) 50 51 04, 50 85 91, 152 26 24 Fax: (+998 71) 50 51 04 contact person: saidbek Karimov e-mail: [email protected]

MInIteCHInvest leAsIng316, Karasaray street, tashkent tel.: (+998 71) 398 57 84, 398 57 54, 139 27 40 contact person: Akbar gulyamov

PAKHtA leAsIng8, j. obidov street, tashkent tel.: (+998 71) 134 20 59, 134 20 57 Fax: (+998 71) 134 20 59 contact person: shuhrat Muhamedov E-mail: [email protected]

PoytAHt-leAsIng89, nukus street, tashkent tel.: (+998 71) 120 58 55, 120 58 56 Fax: (+998 71) 120 58 55 contact person: Larisa tsoy E-mail: [email protected]

UzbeK leAsIng InternAtIonAl1, turab tula street, flour 4, tashkent International banking and Financing center tel.: (+998 71) 139 16 54, 114 64 46 Fax: (+998 71) 120 67 29 contact person: davlat Muhrimov E-mail: [email protected] Web-site: www.uzbekleasing.com

UztrAnsleAsIng35, A.Qodiriy street, tashkent tel.: (+998 71) 144 08 20, 144 81 39 Fax: (+998 71) 144 90 92 contact person: Fayzulla Abdullaev E-mail: [email protected]

�2 LEAsIng In AzErbAIjAn And cEntrAL AsIA 2007

UzCAseAgroleAsIng2, Ahangaran Highway, tashkent tel.: (+998 71) 120 70 02 Fax: (+998 71) 120 74 84 contact person: nuritdin Muhitdinov

UzCAseservICe16, Furkat street, tashkent tel.: (+ 998 71) 120 89 56, 120 60 97 Fax: (+998 71) 120 98 77 contact person: sharif Allyarov

UzselHozMAsHleAsIng4A, Abaya street, tashkent tel.: (+998 71) 144 62 73, 144 61 98 Fax: (+998 71) 144 51 03 contact person: Pahriddin Hodjiev

exPress-leAsIng63, usmon nosir street, tashkent tel.: (+998 71) 363 55 06, 363 55 07 Fax: (+998 71) 363 55 06 contact person: oybek Ibragimov

verdAt rsr 112, Hurshid street, tashkent tel.: (+998 71) 114 60 02, 114 60 03, 138 57 45 Fax: (+998 71) 114 60 02, 114 60 03 contact person: salohiddin safarov

AloKAbAnK30, oybek street, tashkent tel.: (+998 71) 152 78 85, 152 78 74 Fax: (+998 71) 152 78 04 contact person: Farruh Hodjaev

AlP jAMol bAnK21, Ataturk street, tashkent tel.: (+998 71) 139 88 51 Fax: (+998 71) 136 29 41 contact person: bahtiyor zulfikarov

AsAKA bAnK67, nukus street, tashkent tel.: (+998 71) 120 39 94, 120 39 83, 120 81 11 Fax: (+998 71) 120 86 91 contact person: shuhrat Mahmudov

IPAK yUlI bAnK 12A, Farkhadskiy street, tashkent tel.: (+998 71) 116 19 91, 120 38 78, 120 38 80 Fax: (+998 71) 116 58 44 contact person: Anvar Islamov E-mail: [email protected]

gAllAbAnK36, shahrisabzskaya street, tashkent tel.: (+998 71) 136 15 01, 133 42 25, 136 11 05 Fax: (+998 71) 136 11 05, 136 16 17 contact person: Kamol turdiev E-mail: [email protected]

CAPItAl bAnK32, Matbuotchilar street, tashkent tel.: (+998 71) 132 07 01, 132 07 03 Fax: (+998 71) 132 07 04 contact person: nadirbek Halbekov E-mail: [email protected]

CredIt-stAndArt bAnK24, Kunaev street, tashkent tel.: (+998 71) 140 12 07, 140 12 00 Fax: (+998 71) 140 12 17 contact person: Yuliya chernoivanova

PAKHtAbAnK43, Mukimiy street, tashkent tel.: (+998 71) 173 06 30, 120 88 15 Fax: (+998 71) 173 25 26 contact person: Ikromjon urazkulov E-mail: [email protected]

MICroCredItbAnK52, s.Azimov street, tashkent tel.: (+998 71) 173 05 78, 173 05 82 Fax: (+998 71) 133 81 00 contact person: bahtiyor babadjanov

tUron bAnK4A, Abay street, tashkent tel.: (+998 71) 144 33 94, 144 32 52 Fax: (+998 71) 144 88 65 contact person: zarif sattorov

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IPoteKAbAnK17, Pushkin street, tashkent tel.: (+998 71) 133 16 05, 133 63 40, 132 13 24 Fax: (+998 71) 133 03 53 contact person: Abduhalim radjabov

UzProMstroybAnK3, shahrisabzskaya street, tashkent tel.: (+998 71) 120 35 95, 120 45 01 Fax: (+998 71) 133 32 40 contact person: behzod ganiev E-mail: [email protected]

U-Т bAnK15b, Halqlar dustligi Avenue, tashkent tel: (+998 71) 173 83 24, 173 83 27 Fax: (+998 71) 120 63 62 contact person: Adolat rahimjanova

UzKdb bAnK1, Pushkin str., tashkent tel.: (+998 71) 120 80 00, 120 61 49 Fax: (+998 71) 132 08 00, 120 69 70 E-mail: [email protected] contact person: olmos Holboboev

KHAlK bAnK46, Katartal street, tashkent tel.: (+998 71) 173 60 21, 173 86 80, 173 66 08 Fax: (+998 71) 173 60 21 contact person: suhrob Hoshimov

HAMKor bAnK85, bobur Avenue, Andijan tel.: (+998 74) 235 50 63, 224 76 88, 224 70 39, 22 24 02 Fax: (+998 74) 224 75 31 contact person: Lyudmila shishkina Web-site: www.hamkorbank.uz

�� LEAsIng In AzErbAIjAn And cEntrAL AsIA 2007

IfC azerbaIjan - CentraL asIa LeasIng faCILIty advIsory servICes ProjeCt

Leasing has been an important source of medium and long-term financing for companies, both in developed economies, and in countries with economies in transition. Leasing plays an important role in these countries as an effective means to increase the lessee’s

asset base, particularly in private and/or new companies and in sMEs, all of which play a key role in introducing innovation and competition in the economy, and result in job creation.

the International Finance corporation, a member of the World bank group, has a long history financing leasing throughout the world. IFc has invested in over 100 leasing companies in 50 different countries (35 in Europe, Middle East and central Asia). In 25 countries, IFc has initiated the establishment of the first leasing company in that country. IFc’s total investment in leasing for the last 30 years has been over $1 billion.

due to the market development, the International Finance corporation has established an internal facility of $30 million to finance lessors in Azerbaijan and central Asia (AcALF).

In a major effort to strengthen the leasing industry in Azerbaijan, Kyrgyzstan, tajikistan and uzbekistan; IFc in partnership with the swiss state secretariat for Economic Affairs (sEco) launched the AcALF Advisory services activity. It is a three-year program that will improve private sector economic growth, increase access to finance and create employment through the development of leasing.

AcALF Advisory services Project currently provides assistance to 12 participating financial institutions (PFIs) engaged in financial leasing in the region. At the industry level, the project is working to improve the business climate by removing burdensome legal and regulatory obstacles that hinder the viability of leasing. At the institutional level, the project strives to build capacity and strengthen systems within the individual financial institutions.

AcALF Advisory services Project is available to consult with foreign and domestic investors, lessors, lessees, and suppliers on all leasing issues in central Asia and Azerbaijan. Please do not hesitate to contact us with any question. For more information, visit the web site at www. ifc.org/acalf.

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our ContaCts:

office in azerbaijan 2, Istiglaliat str., baku city, Azerbaijan

Venice Palace, 2 floor tel.: (+994 12) 497 45 29 Fax: (+994 12) 497 08 91

Cholpon Kokumova country officer in Kyrgyzstan

214/4 Moscovskaya str., bishkek city, Kyrgyzstan tel.: (+996 312) 64 63 50 Fax: (+996 312) 61 11 48

e-mail: [email protected]

zarina odinaeva country officer in tajikistan

7, Abdullo Komandir str. dushanbe city, tajikistan

tel: (+992 48) 701 14 43, 701 14 40, 701 14 54 Fax: (+992 48) 701 14 48

e-mail: [email protected]

umedjan umarov Project Manager

107b, A.temur str., tashkent city, uzbekistan International business center, 14 floor

tel: (+998 71) 138 59 25, 138 59 28 Fax: (+998 71) 138 59 27 e-mail: [email protected]


IFc, the private sector arm of the World bank group, promotes open and competitive markets in developing countries. IFc supports sustainable private sector companies and other partners in generating productive jobs and delivering basic services, so that people have opportunities to escape poverty and improve their lives. through FY06, IFc Financial Products has committed more than $56 billion in funding for private sector investments and mobilized an additional $25 billion in syndications for 3,531 companies in 140 developing countries. IFc Advisory services and donor partners have provided more than $1 billion in program support to build small enterprises, to accelerate private participation in infrastructure, to improve the business enabling environment, to increase access to finance, and to strengthen environmental and social sustainability. For more information, please visit www.ifc.org.

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Partner

the state secretariat for Economic Affairs is the swiss confederation’s competence center for all the core issues related to the economic policy. It aims to create the basic regulatory and economic policy conditions to enable business to flourish for the benefit of all. It also

represents switzerland in the large multilateral trade organizations and international negotiations and is involved in efforts to reduce poverty and help developing countries with transition economies build sustainable democratic societies and viable market economies. Each year switzerland spends about 1.9 billion swiss francs on development cooperation and transition assistance to countries.

www.ifc.org/acalf

leasing in central asia and azerbaijan

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