Skopje, Macedonia, March , 2002—Financing
options for small businesses in FYR Macedonia have improved considerably
through a new leasing law adopted with support from SEED, the IFC-managed
small and medium enterprise (SME) facility in the Balkans.
The law, passed by the Macedonian parliament on January 31, authorizes
creation of new independent leasing companies with minimum capital of 100,000
Euros. It also sets clear and transparent standards for their supply
of equipment to local companies on contract.
The move is expected to fill an important financing gap for Macedonian
SMEs, who often need new equipment for their operations but cannot obtain
the term loans from local banks required to purchase it. Since Macedonia’s
new leasing companies will retain legal ownership of the assets they lease,
they will be able to overcome this obstacle by qualifying SMEs based on
their generated cash flow, rather than credit history, collateral, or capital
base typically required by banks. The result is expected to be a
shot in the arm for the local small business sector, the key source of
job creation in developing and transition economies.
SEED (Southeast Europe Enterprise Development) is a multi-donor initiative
to strengthen SMEs in Bosnia and Herzegovina, Albania, Macedonia, and the
Federal Republic of Yugoslavia. Last fall it used US$29,450 in Canadian
International Development Agency (CIDA) trust funds to provide an expert
consultant and methodology for interaction with Macedonia’s inter-governmental
Committee for Leasing. This work in turn built on initial feasibility
studies financed by IFC in 1998, pointing to the need for new leasing legislation
for Macedonia. SEED’s aim of having the draft law introduced by
December 31, 2001 and passed by the parliament by January 31, 2002 was
objectively met with minimum delays.
“We commend the Macedonian parliament on this achievement, which has contributed
to an improving business environment for SMEs,” said SEED General Manager
Mariann Kurtz. “Several leasing licenses have already been approved
within the banking sector in Macedonia, and applications have also been
received from three other private companies.”
Ms. Kurtz added that SEED now intends to amplify the positive impact of
this new legislation by organizing targeted workshops and seminars for
financial institutions and SMEs. SEED plans further cooperation with IFC
and others in the establishment of leasing companies in Macedonia. SEED
and IFC are also working together to bring leasing legislation and commercial
leasing companies to Albania, Bosnia & Herzegovina and Serbia. Work
in these countries is underway.
SEED, launched in 2000, is the newest member of the family of regional
IFC-managed SME facilities, along with others in Africa, the Mekong region
(Vietnam, Cambodia and Laos), and the Pacific islands. Another in
China’s western province of Sichuan is underway and is expected to have
its official opening shortly.
“SEED’s leasing work in Macedonia is important for Macedonia in developing
an efficient financial sector. It also shows how IFC’s field-based
technical assistance facilities can translate their experience at the transaction
level into useful advice at the policy level,” said World Bank Group SME
Department Director, Harold Rosen.
IFC’s mission is to promote sustainable private sector investment in developing
countries, helping to reduce poverty and improve people’s lives. IFC
finances private sector investments in the developing world, mobilizes
capital in the international financial markets, and provides technical
assistance and advice to governments and businesses. Since its founding
in 1956, IFC has committed more than $31 billion of its own funds and arranged
$20 billion in syndications for 2,636 companies in 140 developing countries.
IFC’s committed portfolio at the end of FY01 was $14.3 billion.