Lease Prectise in Bangladesh

In: Business and Management

Submitted By omrfrk
Words 536
Pages 3
Lease financing was first introduced in Bangladesh in the early 1980s. Industrial development leasing company of Bangladesh ltd. (IDLC), the first leasing company of the country, was established in 1986 under the regulatory framework of Bangladesh Bank. It was a joint venture of the Industrial Promotion and Development Company of Bangladesh ltd. (IPDC), International Finance Corporation, and Korea development leasing corporation. Another leasing firm, the united leasing company ltd. started its operations in 1989. The number of leasing companies grew quickly after 1994 and by the year 2000, rose to16. The leasing business became competitive with the increase in the number of companies and wider distribution of their market share. There are, however, six other companies conducting leasing business in the country, although they do not use the word leasing in their names. in terms of money value, the leasing business in Bangladesh increased from tk 41.44 million in 1988 to tk 3.16 billion in 2000.
Lease financing, as organized in Bangladesh, operates with the following objectives:
• To assist the development and promotion of productive enterprises by providing equipment lease financing and related services
• To assist in balancing, modernization, replacement and expansion of existing enterprises;
• To extend financial support to small and medium scale enterprises
• To provide finance for various agriculture equipment
• To activate the capital market by operating as managers to the issue, underwriters, or portfolio managers.

The functions of a lease business include lease financing, short-term financing, house building financing, and merchant banking and corporate financing. In this last group of functions, the leasing business in Bangladesh moved away from regular leasing activities and is now involved in stock-market related activities such as issue…...

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