Corporate Financing, Syndication and Credit Risk Managemant
Chapter-01
Introduction
1.1 Introduction
1.2 Importance of the study
1.3 Objective
1.4 Methodology
1.5 Limitation of the study
1.1 Introduction
Leasing is one of the fastest-growing ways of financing equipment in business today. For the last three years, the leasing industry experienced average growth rate of around 30 percent, although the market penetration remains very low range of 3-4 percent of medium term financing. With the new leasing companies and active participation of commercial banks in the leasing business, the overall competition level has increased substantially during the year. Withdrawal of initial depreciation allowance on asset in 1998 continues to adversely affect the profitability of leasing companies. However, among visible non-functioning of development financial institutions (DFIs), ailing capital market and lack of interest of commercial banks in term financing, the leasing industry remains only vibrant financial intermediaries for the medium term financing with less than 5.0 percent non-performing loans.
Lease financing, as organized in Bangladesh, operates with the following objectives: (a) to assist the development and promotion of productive enterprises by providing equipment lease financing and related services; (b) to assist in balancing, modernization, replacement and expansion of existing enterprises; (c) to extend financial support to small and medium scale enterprises; (d) to provide finance for various agriculture equipment; and (e) to activate the capital market by operating as managers to the issue, underwriters, or portfolio managers.
Leasing companies, however, face some problems in conducting their business in the country. The relatively slow growth of the demand side compared to the fast growth of the lease business is one such problem. This leads many leasing companies to operate in partial capacity. The culture of loan default that prevails in the country is also a deterrent. Leasing companies
Introduction
1.1 Introduction
1.2 Importance of the study
1.3 Objective
1.4 Methodology
1.5 Limitation of the study
1.1 Introduction
Leasing is one of the fastest-growing ways of financing equipment in business today. For the last three years, the leasing industry experienced average growth rate of around 30 percent, although the market penetration remains very low range of 3-4 percent of medium term financing. With the new leasing companies and active participation of commercial banks in the leasing business, the overall competition level has increased substantially during the year. Withdrawal of initial depreciation allowance on asset in 1998 continues to adversely affect the profitability of leasing companies. However, among visible non-functioning of development financial institutions (DFIs), ailing capital market and lack of interest of commercial banks in term financing, the leasing industry remains only vibrant financial intermediaries for the medium term financing with less than 5.0 percent non-performing loans.
Lease financing, as organized in Bangladesh, operates with the following objectives: (a) to assist the development and promotion of productive enterprises by providing equipment lease financing and related services; (b) to assist in balancing, modernization, replacement and expansion of existing enterprises; (c) to extend financial support to small and medium scale enterprises; (d) to provide finance for various agriculture equipment; and (e) to activate the capital market by operating as managers to the issue, underwriters, or portfolio managers.
Leasing companies, however, face some problems in conducting their business in the country. The relatively slow growth of the demand side compared to the fast growth of the lease business is one such problem. This leads many leasing companies to operate in partial capacity. The culture of loan default that prevails in the country is also a deterrent. Leasing companies
References: * United Leasing Company limited website: www.ulc.com.bd * Bangladesh bank website: www.bb.org.bd * ULC Annual Report 2011 * Several Booklets from United Leasing Company Limited * Several Newsletter’s from United Leasing Company Limited