Teodora Milenkovic, secretary-general of the Association of Leasing Companies of Serbia - It is necessary to include leasing in Government's subsidy programs

Teodora Milenkovic

Every fourth new vehicle today was purchased through leasing so it is no wonder that in 11, only through leasing, more than EUR 4, 3 billion was poured in economy of Serbia as well as that 126 thousand contracts on financial leasing were signed.

In the past eleven years since it has been present in Serbia, leasing positioned as a significant model of funding procurement of motor vehicles, machines, equipment and real estate with the market totaling EUR 270 m annually which has been recording a constant slight growth, Milenkovic, general secretary at the Association of leasing companies of Serbia, says in her interview for eKapija.

eKapija: How do you see leasing industry in Serbia?

- For its features as a financial product, leasing has become an important competitor to other fudning sources which economy has recognized first, SMEs and entrepreneurs, especially those from industrial branches which have a huge need for transport means. So today, companies take more than 80 percent of leasing portfolio, the most dominant are companies in transport, trading and production activity which buy cars, trucks, buses, trailers, production lines and equipment through leasing. Apart from that, industry has been recording increased interest of agricultural producers for procurement of machines and equipment through leasing such as tractors, combines, supplementary machinery, silos, water supplying systems, cooling chambers, food mixers and milk receipt and delivery systems.

eKapija: How will leasing industry motivate customers? What are leasing companies planning to do to make citizens opt for this kind of procurement funding in larger number?

- First of all, with more favorable funding sources than competitors ‘and then its “natural “features as a financial product. And here, I first refer to the fact that upon procurement through leasing, no additional security means are essential, which enables to a larger number of companies investments in fixed assets. On the other hand, important advantage of leasing is lower operational costs and very simple and fast procedures of approval.

eKapija: How is Serbia positioned at the regional and European leasing map?

- First of all, it is important to say that leasing market in Serbia is very young, especially if compared to the countries with long-standing tradition of this funding method such as Austria whwer leasing had been present over 60 years. Compared to it and other EU countries, where almost 40 percent of SMEs use leasing, domestic market potential has been unexploited, especially in terms of funding trade and infrastructure facilities. Thus, for instance, in Croatia, apart from SMEs sector, one of the biggest leasing customers is state-owned and public sector which, in most of the cases, through financial leasing, funds car fleet, public transport and utility needs and make a very important share in total leasing placements.

On the other hand, funding of procurement of agricultural machinery as well as construction of supplying system, energy efficiency development and real estate funding are fields where leasing can confirm itself as the most favorable funding method which would also contribute to its further development.

eKapija: What are the 2014 results like?

- In the first nine months of 2014, where we have data available at this moment, value of leasing contracts in Serbia has been on the increase. It totaled EUR 211,5 m which is an increase of more than 8 percent compared to the same period last year. Apart from that, we have generated growth at the same period when it comes to the number of signed contracts by almost 7 percent. This is more or less the trend we see the end of the entire 2014.

eKapija: What are the expectations for 2015 when it comes to leasing in Serbia?

- In the next period, the Association of leasing companies of Serbia expects to the leasing increasing trend to continue. SMEs will turn to leasing more since it is the funding method which enables them to compensate limited possibilities of funding from other sources and thus, through leasing, invest in further production.

eKapija: What are some of the upcoming plans which ALCS will try to reach? Which legal provisions do leasing companies still consider illogical?

- It is necessary to include leasing in subsidized programs of the governments which aim at promotion of economic activity and thus equal it with banking loans i.e. to provide equal treatment of all kinds of funding. Leasing implementation in subsidized funding would lead to more favorable funding than the current one, which would at the same time be favorable for the state and leasing companies and leasing end user.

Jelena Djelic