A bill “On Leasing Activities” will be drafted in Azerbaijan in 2017, says the Strategic Road Map for the Manufacture of Small and Medium Entrepreneurship-Level Consumer Goods in Azerbaijan.
A relevant legislative and regulatory framework will be formed on the basis of the new law and this will allow creating more favorable conditions for leasing companies, according to the document.
“Privileges will be introduced to develop the leasing market. Additional preferences may also cover the priority sectors of the economy,” the Road Map says.
The share of the leasing market in Azerbaijan’s GDP can reach 2 percent by 2020 and 4 percent by 2025, according to the projections.
“In developed countries, leasing is widely used as a tool of investment. About 25-30 percent of all investment in economy is put through leasing operations. The leasing market in Azerbaijan began to develop in 2003 and it doubled each year until 2008,” reads the document.
However, since 2008 the development has stopped and the portfolio of operations in this market decreased from $200 million to $150 million by 2011, the Road Map says.
The main problem of Azerbaijani leasing companies is the lack of financial resources, according to the document.
"Leasing coverage, its portfolio and capitalization are at a low level, which in turn make the market unattractive for foreign investors. Currently, more than 30 leasing companies operate in Azerbaijan and the volume of their operations is 200 million manats, while their share in GDP is 0.5 percent," the document says.
The Strategic Road Map for the Manufacture of Small and Medium Entrepreneurship-Level Consumer Goods in Azerbaijan is one of the 12 road maps designed to ensure the sustainable development of the country’s economy.
It is planned to create over 34,000 new jobs and ensure the GDP growth by 1.26 billion manats in Azerbaijan by 2020 by implementing measures stated in the document.