8th Global Conference on Business & Economics
EUROPAINSTITUT
WIRTSCHAFTSUNIVERSITÄT WIEN
ISBN : 978-0-9742114-5-9
EUROPAINSTITUT
UNIVERSITY OF ECONOMICS AND
BUSINESS ADMNISTRATION VIENNA
Market Structure as Determinant: the Case of Leasing in
Banking Industry Transformation in Central and South
Eastern Europe
ELISABETH KICHLER
AND
PETER HAISS1
Paper for presentation at the 8th Global Conference on Business & Economics,
Florence, Oct. 18-19, 2008
Abstract
As bank credit supply was hampered by a market structure exemplified by weak creditor right enforcement
during the early years of transition in Central and Eastern Europe (CEE) and South Eastern Europe (SEE),
leasing became an important substitute and entry strategy for foreign banks. Traditional discussions of the
financial industry concentrate on bank loans only and rather neglect alternative forms of finance. We analyse
the relevance of leasing in CEE and SEE in comparison to bank loans and give an overview of the industry
structure of leasing providers. We suggest that (1) legal deficiencies play an important role in the current
market structure, that (2) leasing represents an underestimated part of the financial industry in transition
economies and (3) that leasing can play an important role in market development.
Key Words: financial industry transformation, leasing, market structure, regulation and development
Elisabeth Kichler
Graduate student, University of
Economics and Business
Administration, Vienna, Austria
Peter R. Haiss
Lecturer, EuropaInstitut,
University of Economics and
Business Administration,
Vienna, Austria
Althanstrasse 39-45/2/3
A-1090 Wien, Austria
phone: +43 (0) 664 812 29 90
fax +43 (0) 1 313 36- 758
[email protected]
Althanstrasse 39-45/2/3
A-1090 Wien, Austria
phone +43 (0) 650 7202409
fax +43 (0) 1 313 36- 758
[email protected]
The opinions expressed are the authors’ personal views and not necessarily those of the institutions the authors are affiliated with. The authors are
indebted to research support by Marie-Therese Marek and helpful comments by Gerhard Fink and the Finance-Growth/Integration Nexus-Team at
WU-Wien, http://www.wu-wien.ac.at/europainstitut/forschung/nexus
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Market Structure as Determinant: the Case of Leasing in Banking Industry Transformation in Central
and South Eastern Europe
ABSTRACT
As bank credit supply was hampered by a market structure exemplified by weak creditor right enforcement
during the early years of transition in Central and Eastern Europe (CEE) and South Eastern Europe (SEE),
leasing became an important substitute and entry strategy for foreign banks. Traditional discussions of the
financial industry concentrate on bank loans only and rather neglect alternative forms of finance. We analyse
the relevance of leasing in CEE and SEE in comparison to bank loans and give an overview of the industry
structure of leasing providers. We suggest that (1) legal deficiencies play an important role in the current
market structure, that (2) leasing represents an underestimated part of the financial industry in transition
economies and (3) that leasing can play an important role in market development.
INTRODUCTION
During the first phase of transition in the formerly centralized countries of Central and South Eastern Europe
(CEE and SEE), many state-owned enterprises were closed, restructured or privatized. The entailed evolvement
of the private sector also created opportunities for small and medium enterprises (SMEs) to emerge in order to
fill the arising niches. But these companies, especially SMEs, faced the problem of limited access to finance
due to suboptimal market structures, i.e. weak creditor rights protection and enforcement and a resulting
reluctance of banks to grant credits (Herzberg & Watson, 2007; Klapper & Sarria-Allende & Zaidi, 2002;
Pissarides, 1999; Sirtaine & Skamnelos, 2007). These structural anomalies created opportunities for alternative
mechanisms to facilitate access to capital (Beck & Demirgüç-Kunt, 2006). As leasing involves a strong security
advantage for the lessor due to the ownership of the asset, security arrangements and credit history provisions
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are easier met compared to bank loans. This is especially relevant to SMEs since they often cannot offer good
track records and collateral and can therefore use leasing as a substitute to bank credit (IFC, 1996; Koh, 2006).
While leasing thus played a major role in financial system transformation and has gained considerable
importance in recent years for the functioning of the financial industry, research on the role of leasing and other
alternative forms of finance in the financial system is scarce (Moutot & Gerdesmeier & Lojschová & von
Landesberger, 2007). We close this gap by identifying the relevance of leasing in transition countries and its
implications on financial market structure. Throughout this paper, we focus on twelve Central and South
Eastern European countries: Czech Republic, Hungary, Poland, Slovak Republic, Slovenia, Estonia, Latvia,
Lithuania, Croatia, Bulgaria, Romania, and Turkey. We review existing literature on credit allocation in
transition countries, associated problem areas and the relevance of leasing as a substitute in Section 2. We
suggest that due to the problems of credit allocation and low institutional and regulatory quality, leasing
became an important substitute, especially for SMEs, and plays an important role in the financial industry in
transition economies. While high loan growth rates received considerable attention in conventional financial
system analyses (e.g. World Bank, 2007), we argue that the high growth rates of leasing volumes in CEE and
SEE also need ample attention. In Section 3, we also look at the importance of equipment leasing vs. real estate
leasing and which types of equipment assets are leased prevailingly. In addition, the market structure (leasing
providers, profile and origin of leasing companies, market concentration) is analysed. In Section 4, the main
findings are discussed and Section 5 concludes. We argue that leasing represents an underestimated part of the
financial industry which can play an important role for market development, especially in emerging markets.
LITERATURE REVIEW
The development of credit is the subject of numerous studies, revealing a number of provisions that are
essential for adequate credit allocation. Among the most important ones are the protection of creditor and
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property rights in order to secure creditors and to make the use of collateral possible (Djankov & McLiesh &
Shleifer, 2007; Herzberg & Watson, 2007; Zoli, 2007). Although the development of creditor-friendly collateral
laws is essential for the growth of credit, there is broad consent in existing literature that they are not sufficient.
To make creditor rights effective, the adequacy of court enforcement and of the legal and judiciary environment
is also a crucial issue (Giannetti, 2002; Herzberg & Watson, 2007; La Porta & Lopez-deSilanes & Shleifer &
Vishny, 1997; Safavian & Sharma, 2007).
In Eastern Europe, the early years of transition were marked by a high number of non-performing loans (Breuss
& Fink & Haiss, 2004). The countries of Central and South Eastern Europe have implemented many reforms in
the course of their transition process and achieved improvements in the legal environment and concerning
creditor rights (Delannay & Weill, 2004). Together with improved competition through the emergence of new
private banks, credit allocation could be improved and the allocation of loans to non-performing companies
could be reduced (Thorne, 1993; Fink & Haiss & von Varendorff, 2007). Nevertheless, creditor rights
protection and the availability of collateral are still limited (Delannay & Weill, 2004) and even more important,
transition countries still lack effective legal institutions to enforce their laws (EBRD, 2006; Pistor & Raiser &
Gelfer, 2000). Peev & Yurtoglu (2007) found that CEE and SEE countries still only show low to average
institutional quality.
Figure 1 depicts the institutional quality index as measured by Zoli (2007) with data from the Freedom House
and the International Country Risk Guide. It ranges from 0 to 4 and includes indices of property rights, control
of corruption, quality of bureaucracy, and rule of law. The graph shows that the institutional quality of the
European emerging economies is below that of the advanced market economies of the European Union and of
the U.S. Concerning our country focus, especially Romania and Bulgaria lack sufficient institutional quality. In
Figure 2 we see the Borrowers and Lenders Legal Rights Index as depicted in Zoli (2007) with data from the
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Doing Business Database. It ranges from 0 to 1 and measures the degree to which the rights of borrowers and
lenders are protected by collateral and bankruptcy laws. With regard to the countries we analyse, the index
shows good results for the Slovak Republic and Latvia, but there are a number of countries where bankruptcy
and collateral laws are not adequate, including especially Turkey, Estonia, Lithuania, Poland, and Romania.
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Credit to the private sector has shown high growth rates in Eastern European countries, mainly for shorter
maturities (Backé & Zumer, 2005; World Bank, 2007). Nevertheless, the leverage rate in CEE, especially for
long-term debt, is still much lower than in the mature markets of the EU-15 (Peev & Yurtoglu, 2007). Sirtaine
& Skamnelos (2007) found that the growth rates in credit volumes in the emerging countries are mostly
attributable to loans to households, while corporate credit only increased slightly.
Within the corporate sector, lack of collateral and prevalent problems with property rights, bankruptcy
procedures, contract enforcement and political interference inhibit credit allocation in transition countries
especially to SMEs since they often lack a track record, reliable company information and collateral (Herzberg
& Watson, 2007; Klapper & Sarria-Allende & Zaidi, 2002; Pissarides, 1999; Sirtaine & Skamnelos, 2007).
Peev & Yurtoglu (2007) argue that the problem of availability of bank credit was also due to the supply side of
the market since banks did not have efficient assessment tools to screen clients. Banks were inexperienced in
assessing the creditworthiness of customers and thus very risk-adverse and reluctant to assign loans, especially
to newly-established companies and to state-owned firms that were full of bad loans (Delannay & Weill, 2004;
Pissarides, 1999). If SMEs are awarded credits, the majority of loans are short-term and of low volume and
banks usually demand high collateral because of their lack of knowledge on the assessment of the
creditworthiness of clients (Klapper & Sarria-Allende & Zaidi, 2002).
These obstacles caused companies, especially SMEs, to look for alternative forms of financing. Despite the
resulting high importance of equity capital, own funds and accumulated profits (Delannay & Weill, 2004),
leasing was seen as an appropriate form of financing. The inappropriate legal systems in transition countries led
to an insufficient protection of creditors in case of a debtor’s bankruptcy. The creditors could only assure
settlement of the debts by demanding securities, but especially SMEs were often not able to provide collateral.
Leasing was found to be a solution to these problems since first of all, a lessor retains ownership of the leased
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asset which entails that the lessee does not need to allocate additional collateral. In addition, leasing offers a
possibility to circumvent insufficient bankruptcy rights by offering an even higher security than a collateralized
loan due to the lessor’s retained ownership of the asset. As a result, leasing typically has the highest priority in
bankruptcy. Although this will also depend on the legal environment, we agree with Eisfeldt & Rampini (2007)
in that it will always be easier for an owner to regain control of his asset than for a secured creditor to demand
his security interest in an asset. This confirms the finding of Krishnan & Moyer (1994) who state that leasing
entails lower bankruptcy costs than a secured loan.
De Haas & Naaborg (2005) found that loans to SMEs were not very prevalent during the first half of the 90s
and that the inadequate legal and property rights system, deficient track records and resulting difficulties in
credit screening led to a sharp increase in leasing rates during the first phase of transition, especially with
SMEs. Since the second half of the 90s, a rise in bank loans can be documented due to increased competition by
foreign banks, enhanced screening and monitoring methods to assess the higher risks of SMEs and a higher
cooperativeness of SMEs in providing information to banks (Eller & Haiss & Steiner, 2006). In addition, legal
and accounting systems improved, leading also to an increasing safety concerning the use of collateral. Despite
these improvements concerning track records of smaller companies, credit screening methods and the legal
system, bank employees are still inexperienced and partly reluctant when it comes to awarding loans to riskier
SME clients and leasing still plays an important role in the financing of SMEs.
According to the experience of the International Finance Corporation, an affiliate of the World Bank providing
financial assistance to developing countries, leasing has shown to be an adequate financing possibility for the
private sector in transition countries, because most companies there have restricted track records, not enough
collateral which can be used and because many bank are in a restructuring process (IFC, 1996).
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Koh (2006) found that due to the advantages of leasing, even companies or consumers that could have taken out
a loan opted for this form of financing. Despite less strict security arrangements in views of historical financial
performance and credit history, transaction costs of leasing are lower, a lease contract offers more flexibility to
adjust possibly unsteady cash flows and leasing rents, leasing offers a form of off-balance financing and leasing
payments are in many countries fully tax deductible (Koh, 2006). In comparison to bank loans, which often
include covenants limiting corporate operations, leasing normally does not impose limitations on corporate
operations, but only on the leased assets (Yan, 2002).
Realdon (2006) investigated the pricing of secured bank loans versus financial leases and found that due to the
ownership of the leased asset, a lessor can actually gain from the lessee’s default, especially when the lessee has
to make prepayments, whereas a secured creditor cannot. Leasing is therefore especially interesting for SMEs,
because they usually have higher default probabilities and a higher necessity of making initial prepayments
which in turn may reduce credit spreads and make leasing cheaper than credit taking. Krishnan & Moyer (1994)
found that leasing becomes a more attractive financing alternative when bankruptcy probability increases
because the bankruptcy costs of leasing are smaller for a lessor than those of credit issuance for a creditor. This
in turn decreases the costs of leasing for the lessee and makes it available at lower cost than a loan. These
findings go hand in hand with the study of Sharpe & Nguyen (1995) who found that low-rated firms with poor
credit quality and resulting high costs of external financing show higher volumes of leasing than highly-rated
companies since they can reduce their financing costs by means of leasing. Also Koh (2006) found that leasing
can be offered cheaper than bank loans since delinquencies are lower.
Leasing companies are contributing to market development by enabling SMEs to access formal financing that
where not available otherwise, but also by increasing financing possibilities for larger companies and
municipalities. In addition, the liabilities of leasing companies help develop the capital market through
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borrowing from banks and other financial institutions and through the issuance of financial instruments like
bonds (IFC, 1996). Moreover, the existence of private SMEs in transition countries assists economic
development since they encourage transition by establishing a pluralistic society with independent
entrepreneurs and a decentralised economy, enhancing competition and encouraging innovation. Besides that,
SMEs are important in the transition process since they take unemployed people that used to work in privatised,
restructured, or state-owned companies (De Haas & Naaborg, 2005).
THE LEASING INDUSTRY STRUCTURE IN CEE AND SEE
The European leasing market
Leasing has shown high growth rates across Europe over the past decade. In 2001, Leaseurope, the European
Federation of Leasing Company Associations, reported new leasing volumes of approximately €193 billion
with real estate leases making up €34 billion and equipment leasing accounting for €159 billion (Leaseurope,
2001). From 2004 to 2005, the leasing industry in Europe increased by almost 14% to a total volume of
approximately €263 billion (see Table 1). In 2006, the total volume of new leases rose to €298 billion. Of that,
equipment leasing accounted for €251 billion and real estate leasing for €47 billion (Leaseurope, 2006).
Leaseurope bases its statistics on data from companies that are members of the national leasing associations. In
2006, the average representativity of these companies amounted to 92.5% of the whole leasing market.
In terms of penetration, Europe is still behind the U.S. which showed a penetration rate of around 27% in 2005
(Koh, 2006), but the percentage of investments financed by leasing is steadily increasing in Europe. In 2001,
the penetration rate amounted to 14%, in 2006 it already rose to 19% (Leaseurope, 2001, 2006). Koh (2006)
argues that "Leasing gives loans a run for their money: the market for leasing in Europe now eclipses that of the
US as companies, consumers and the public sector increasingly favour the product over loans, much to the
delight of banks”. Siemens Financial Services estimates that through asset-financing techniques, such as
leasing, more than €130 billion from capital budgets could be freed up annually (Koh, 2006).
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Central and Eastern Europe (CEE) has experienced the greatest increase from year to year out of any other
region in Europe (see Figure 3). In the past two years alone, the new leasing growth rate in Central and Eastern
Europe has grown by about 39% from 2004 to 2005 and by 42% from 2005 to 2006. Overall, the CEE countries
averaged a 40% increase over the past two years, doubling the second and third biggest leasing market
increases in Europe. In this period, the next two biggest average percentage increases in Europe could be found
in the Mediterranean area with an average rise of 18% and in the Nordic sector which experienced an average
increase of 17%. With this high growth rate, leasing has even outpaced loan growth in CEE. Koh (2006) argues
that this high growth rate in CEE is partly due to the fact that the starting base of leasing volumes is relatively
low compared to more advanced market economies. As can be seen in Table 1, the volume growth in Central
and Eastern Europe mirrors the Scandinavian markets in absolute terms, but experienced the greatest relative
increase from 2004 to 2005.
Figure 4 shows new leasing volumes for the twelve countries we focus on. Poland reports the highest volume of
new leasing deals with €6,677 million, followed by Turkey, the Czech Republic and Hungary with €4,258,
€4,4147 million and €3,983 million, respectively. Equipment leasing clearly dominates over real estate leasing
in all markets. Looking at the breakdown of equipment leasing by asset, we see that road transport vehicles and
motorcars together make up the majority of equipment leases in all countries with the exception of Turkey
where it only accounts for a small percentage of the total equipment leasing volume (see Figure 5). Leasing of
machinery and industrial equipment clearly prevails in Turkey, but also plays an important role in the other
Eastern European countries. Data for Croatia is not available.
Leasing providers
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In the first part, this section gives an overview of the number of leasing providers in the investigated markets by
profile and by origin. Croatia is excluded due to data availability. In the second part, the five biggest leasing
providers of all 12 markets according to market share are displayed considering issues of market concentration,
origin as well as industry affiliation. The main data sources for this overview are the European as well as
national leasing associations.
Figure 6 reveals that banks play an important role in the provision of leasing services in all transition countries.
The number of independent leasing companies only exceeds the number of leasing firms from the banking
industry in the Czech Republic and Romania, but independent providers play an important role in Hungary, the
Slovak Republic and Slovenia as well. In all countries, captive leasing companies only make up a small part of
all leasing providers.
The involvement of international companies in the provision of leasing services is very high in Central Eastern
Europe and the Baltic countries where the majority of leasing companies are either local branches of or joint
ventures with international companies (see Figure 7). Nevertheless, there are also a high number of fully or
mainly national companies in the Czech Republic, Hungary, the Slovak Republic, and Slovenia. Romania and
Turkey show a different structure with a majority of national leasing companies. Especially in Turkey, the
number of international providers is very low.
Turning to the largest providers in the twelve Eastern European markets, we see that market concentration is
highest in the Baltic States, Slovenia, and Croatia with the biggest provider in each case holding a major part of
the leasing market (see Table 2). In the Baltic countries, which are characterized by a low number of leasing
companies, the five largest providers occupy almost the whole market. Lowest market concentration can be
found in the Czech Republic, Hungary, Poland, the Slovak Republic, Bulgaria, Romania, and Turkey with the
largest leasing provider holding less than 20% of the market.
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Considering the industry affiliations of the five largest leasing companies, Figure 8 shows that banks dominate
in all markets. Banks as leasing providers are also prevalent in the Czech Republic, the Slovak Republic and
Romania although these countries show a high number of independent leasing companies. In Poland, Latvia,
Lithuania, and Bulgaria, all five largest providers come from the banking industry, which is not surprising in
Poland, Latvia, and Lithuania given the high percentage of banks as leasing providers. The dominance of banks
among the five largest providers in Bulgaria is interesting since they make up less than half of the existing
companies. On the other hand, although the majority of leasing providers in Slovenia and Turkey are banks,
they only account for three of the five largest companies.
Looking at the origin of the five largest leasing providers in Figure 9, we find that foreign companies clearly
dominate. The only exception is Turkey, which is characterized by a high percentage of national leasing
companies, where national companies also manage to hold a majority of the leasing market. Although the
Czech Republic, the Slovak Republic and Romania also show a high percentage of national leasing companies,
the five biggest leasing providers are foreign institutions. The five largest providers in Poland, Estonia,
Lithuania, Bulgaria, and Croatia are foreign, which is not surprising given the high percentage of international
companies involved in providing leasing services.
DISCUSSION
Although the European leasing market is still underdeveloped in comparison to the U.S., leasing volumes have
shown high growth rates within Europe and the penetration of leasing is increasing steadily. The Central
Eastern European countries, albeit from a low base, have shown an average increase of 40% between 2004 and
2006, outpacing all other European regions. Leasing of road transport vehicles and cars are the main types of
leasing in CEE and SEE, followed by leasing of machinery and industrial equipment.
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The analysis of the leasing providers in the 12 investigated countries shows that foreign banks clearly dominate
the leasing markets in these countries. Although the Czech Republic, the Slovak Republic, Slovenia, and
Romania show a relatively high number of independent leasing companies, they do not account for the largest
providers, banks also dominate in these markets. Concerning the origin of leasing companies, there is a high
number of fully or mainly national companies in the Czech Republic, Romania, and especially Turkey, but
Turkey is the only country where domestic providers occupy a significant portion of the leasing market. As far
as market concentration is concerned, the largest leasing provider holds a major part of the market in the Baltic
countries, Slovenia, and Croatia. Market concentration is lowest in Poland and Romania.
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CONCLUSIONS
During the first phase of transition, weak creditor and property rights protection and a lack of effective legal
institutions to enforce existing laws impeded effective credit allocation to private companies in transition
countries. Newly restructured banks were unfamiliar with screening the creditworthiness of companies and
therefore reluctant to grant loans to companies that could not provide sufficient collateral. This made access to
finance a major issue for SMEs which often could not provide adequate track records and collateral as security
and therefore had to consider alternative forms of financing. Leasing proved to resolve these problems.
Through the lessor’s retained ownership, a lessee is not required to provide additional collateral and insufficient
bankruptcy rights can be circumvented as leasing entails the highest priority in bankruptcy. Leasing was thus
seen to be a good substitute to credit taking, especially for SMEs, leading to higher financing rates and in turn
an encouraged transition process. The financial market structure in CEE thus differs. Conventional discussions
of financial industries in transition economies did not pay ample attention to this factor in economic
development. Leasing is showing high growth rates in Europe, especially in Central Eastern European countries
leasing rates are booming, thus supporting the suggestion that leasing is especially important in transition
countries. Concerning the providers of leasing services, most companies in Central and South Eastern Europe
are controlled by foreign banks. This leads to the assumption that many foreign banks recognized the potential
of leasing in transition countries and the possibility to lend money to a much bigger clientele without the risks
associated to bank loans. We conclude that leasing provides a viable alternative to bank loans, while bearing
less risk than the latter and thus supports financial market development. Leasing as an alternative form of
finance deserves more attention by market participants, supervisors and researchers.
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Pistor, K., & Raiser, M., & Gelfer, S. (2000). Law and finance in transition economies. Economics of
Transition, 8(2), 325-368.
Realdon, M. (2006). Pricing the Credit Risk of Secured Debt and Financial Leasing. Journal of Business
Finance & Accounting, 33(7/8), 1298-1320.
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484-508.
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Sirtaine, S., & Skamnelos, I. (2007). Credit Growth in Emerging Europe: A Cause for Stability Concerns?.
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07/245.
Homepages of leasing and financial associations:
Association of Leasing Companies in Poland: www.leasing.org.pl
Association of Leasing Companies of Slovak Republic: www.lizing.sk
Croatian Financial Services Supervisory Agency: www.hanfa.hr
Czech Leasing and Finance Association: www.clfa.cz
Estonian Leasing Association: www.liisingliit.ee
Hungarian Leasing and Finance Association: www.lizingszovetseg.hu
Latvian Leasing and Factoring Association: ww.llda.lv
Leaseurope (European Federation of Leasing Company Associations): www.leaseurope.org
Lithuanian Leasing Association: www.lease.lt
Turkish Leasing Association: www.fider.org.tr
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TABLES
Table 1: New leasing volumes per cluster
New Leasing Volumes
Growth
2004
2005
21,151.45 25,860.53 22.3%
13,379.14 17,475.17 30.6%
53,651.00 55,773.62
4.0%
44,410.00 49,270.00 10.9%
38,039.96 44,160.00 16.1%
26,915.00 28,776.00
6.9%
m€
Mediterranean
Nordic
UK & Ireland
Germany
Italy
France
Benelux, AT &
CH
CEE
18,640.41 20,387.84
14,940.87 21,199.30
231,127.84 262,902.45
9.4%
41.9%
13.8%
Source: Leaseurope, 2005
Table 2: Market shares of the five largest leasing providers1
Country
Czech Republic
Hungary
Poland
Slovak Republic
Slovenia
Estonia
Latvia
Lithuania
Bulgaria
Romania
Croatia
Turkey
Market shares of five biggest leasing providers
14.9%
11.2%
8.4%
7.2%
7.1%
16.6%
9.1%
9.0%
8.9%
8.5%
12.2%
10.4%
9.9%
6.1%
5.6%
18.7%
17.5%
10.3%
10.2%
10.1%
38.1%
9.9%
9.2%
6.1%
5.9%
53.2%
28.1%
10.2%
7.8%
0.6%
42.3%
23.2%
11.5%
6.9%
5.9%
39.3%
36.7%
6.6%
6.3%
2.9%
19.6%
12.6%
9.7%
7.6%
6.9%
9.0%
8.4%
6.1%
6.1%
5.7%
43.1%
12.7%
10.5%
10.0%
9.4%
14.2%
11.0%
10.7%
7.1%
7.0%
Sum
48.9%
52.1%
44.2%
66.8%
69.2%
99.9%
89.8%
91.8%
56.4%
35.4%
85.8%
50.0%
Sources: Czech Leasing and Finance Association; Hungarian Leasing and Finance Association;
Association of Leasing Companies in Poland; Association of Leasing Companies of Slovak Republic;
Jakin, 2005: 29; Estonian Leasing Association; Latvian Leasing and Factoring Association;
Lithuanian Leasing Association; Kroatische Wirtschaftskammer, 2006; ICEX, 2006: 63;
DailyBusiness.ro; Turkish Leasing Association
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FIGURES
Figure 1: Institutional quality index as of 2006
Source: Zoli, 2007
Figure 2: Borrowers and lenders legal rights index as of 2006
Source: Zoli, 2007
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Figure 3: New leasing growth rates per cluster
22.3%
M editerranean
Nordic
UK&Ireland
-2.5%
Germany
Italy
France
Benelux, AT&CH
13.6%
30.6%
3.6%
4.0%
10.9%
2.6%
16.1%
8.9%
6.9%
4.3%
9.4%
6.9%
41.9%
38.6%
CEE
-5%
5%
15%
2005/2006
25%
2004/2005
35%
45%
Sources: Leaseurope, 2005; Leaseurope, 2006
Figure 4: New leasing volumes in m€ as of 2006
7,000
6,000
5,000
4,000
3,000
2,000
1,000
Equipment
Real estate
Source: Leaseurope
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Turkey
Croatia
Romania
Bulgaria
Lithuania
Latvia
Estonia
Slovenia
Slovak
Republic
Poland
Hungary
Czech
Republic
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Figure 5: Equipment leases by type of asset as of 2006 (Turkey as of 2003)
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
Machinery and industrial equipment
Road transport vehicles
Ships, aircraft, railway, rolling stock
Turkey
Romania
Bulgaria
Lithuania
Latvia
Estonia
Slovenia
Slovak
Republic
Poland
Czech
Republic
Hungary
0%
Computers and business machines
Motorcars
Others
Source: Leaseurope
Figure 6: Leasing companies by profile as of 2006 (Turkey as of 2003)
70
60
50
40
30
20
10
Turkey
Romania
Bulgaria
Lithuania
Latvia
Estonia
Slovenia
Slovak
Republic
Poland
Hungary
Czech
Republic
0
leasing companies with banking status or banks
leasing companies owned by banks
captive leasing companies
independent leasing companies
Source: Leaseurope; Latvian Leasing and Factoring Association; Lithuanian Leasing Association
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Figure 7: Leasing companies by origin as of 2006 (Turkey as of 2003)
70
60
50
40
30
20
10
fully or mainly national companies
local branches of international companies
Turkey
Croatia
Romania
Bulgaria
Lithuania
Latvia
Estonia
Slovenia
Slovak
Republic
Poland
Hungary
Czech
Republic
0
joint ventures with international companies
Sources: Croatian Financial Services Supervisory Agency; Leaseurope; Latvian Leasing and Factoring
Association; Lithuanian Leasing Association
Figure 8: Industry affiliations of five largest leasing providers
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5
4
3
2
banking industry
independent leasing companies
Turkey
Croatia
Romania
Bulgaria
Lithuania
Latvia
Estonia
Slovenia
Slovak
Republic
Hungary
Czech
Republic
0
Poland
1
captive leasing companies
Sources: Company homepages
Figure 9: Origin of five largest leasing providers
5
4
3
2
1
foreign
domestic
Sources: Company homepages
End Notes
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Turkey
Croatia
Romania
Bulgaria
Lithuania
Latvia
Estonia
Slovenia
Slovak
Republic
Poland
Hungary
Czech
Republic
0
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1
ISBN : 978-0-9742114-5-9
Data for the overviews of the five largest leasing providers are for the Czech Republic, Poland, the Slovak
Republic, Latvia, Bulgaria, and Romania by volume of new leases in 2006, for Hungary by volume of new
leases in the first three quarters of 2007, for Slovenia by business volume in 2003, for Estonia and Croatia by
volume of new leases in 2005, for Lithuania by share of leasing portfolio in 2006, and for Turkey by volume of
new leases in 2004.
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