As their businesses grow, manymicrobusiness owners would like to purchase new machineryfrom a microfinance institution (MFI), since such equipmentcan hold the key to increasing production. However, MFIs areoften not able or willing to lend for longer periods oftime, with grace periods that long term lending formachinery requires. Long term financing from other sourcesis usually not feasible, since banks and leasing companiesrequire collateral, a well-documented credit history andfinancial statements. For many microbusinesses, leasingcould provide an effective alternative to taking on moredebt. This note reviews financial and operational leasing,describes two microleasing experiences in Latin America,identifies risks, and provides recommendations for launchinga micro-leasing program.
PDF
download
878987797
028-85220240
