Over EUR 8 Billion Invested in Serbian Economy Through Leasing

In the past 20 years, leasing had enabled the investment of over EUR 8 billion in the financing of the capital assets of the Serbian economy, announced the Association of Leasing Companies in Serbia (ALCS). A total of 250,000 financial leasing agreements have been signed.

– It is noticeable that the economy is constantly renewing financial leasing contracts and that the financing of companies this way has become a common practice in the financing of capital assets, so there are companies which are financing their operations through financial leasing for the fourth or fifth time already – stated Teodora Milenkovic, the secretary-general of the ALCS.

Milenkovic added that leasing financed the capital assets, thereby additional stimulating the development of economic activities in the country:

– Leasing is especially important for the necessary investments of small and medium enterprises, because it facilitates investing in the business operations and, at the same, time increases competitiveness in the local and foreign markets.

According to the analysis done by the ALCS, in the structure of the newly signed agreements over the years, with slight oscillations depending on the year, the financing of passenger vehicles amounted to 41% of the portfolio, commercial and cargo vehicles accounted for 36%, whereas the financing of machinery and equipment amounted to 22%, and real estate accounted for 1%. Also, according to the data for 2022, each third newly sold vehicle is financed through leasing.

– The data show that financing through leasing is constantly on the rise. If we analyze the data for the past 10 years, we will notice that the average annual rate of the growth of the leasing industry is as much as 13.3%. In the first half of this year, the value of the newly signed agreements grew 19% compared to the same period last year. If this trend continues and if it is applied to the value of the newly signed financial leasing agreements from last year, when it amounted to EUR 699 million, our expectations are that, this year, the value of the financial leasing agreements will reach EUR 830 million. This is an extremely important piece of data, considering that this year has been extremely challenging and that the impact of the problems related to the trade chains and the inflation in the global market and in Europe is spilling over into Serbia. Financial leasing is recording a growth of financing, despite the presence of the abovementioned challenges – said Bojan Vracevic, the president of the ALCS.

Vracevic adds that the reason for this can be found in the flexibility of this financial model, the enabling of the keeping of the liquidity of business entities and a simple approval procedure, making it an important instrument in supporting the economy.

Milenkovic and Vracevic point out that the most frequent users of leasing are small and medium enterprises (SMEs) and that it is very challenging to provide them with the possibilities which will meet their needs.

The Association of Leasing Companies in Serbia was founded in 2004, in line with the initiative of the SEED (Southeast Europe Enterprise Development) – the World Bank’s program for the development of SMEs in Southeast Europe.

Most leasing companies are owned by banks, and among the leasing companies are vendor leasing companies, as well as privately owned leasing companies. In the past two years, two new companies have arrived to the market of Serbia, one of which is a greenfield investment.

Asocijacija lizing kompanija ALCS Beograd

Association of Leasing Companies in Serbia

ALCS

Teodora Milenković

Bojan Vračević

leasing

financial leasing

financing of capital assets