Leasing industry creates many opportunities in rural areas
Prasanna De Silva
The leasing industry has created many opportunities in the rural
areas of the country despite the current economic crisis in the world.
“The leasing industry concentrates mainly on financial vehicles.
During the past year there was a significant drop in demand for
imported vehicles due to the higher tax implementation. The higher tax
implementation and the current economic crisis in the world had
adversely affected the leasing industry. During 2007, the total value of
written leases was Rs. 77 billion and it dropped to Rs.54 billion last
year, a 29 percent drop in demand,” said Chairman, Leasing Association
of Sri Lanka, Prasanna De Silva.
“Up to 2007, the growth rate in the demand was 15 - 20 percent and
that trend changed from last year in an adverse manner. This is mainly
due to the higher interest rates and rentals which customers cannot
afford,” he said.
“Even though, the current economic situation is affecting the
industry adversely, many opportunities have been created within the
Since there is a higher tax implementation on imported and
reconditioned vehicles, there is an increase in demand for second-hand
vehicles in the country.
“Hence, as the leasing Association of the country, we have educated
all leasing companies to grab the market potential in second-hand
vehicles to sustain in this crisis situation.”
“From the total portfolio of the industry only 10 - 12 percent have
been leased for private cars and the rest is for income generating
commercial vehicles such as trucks, three wheelers, tractors and other
commercial vehicles for self-employed individuals.”
“Even though, many leasing institutes have not been recognised, there
are many untapped markets in the rural areas in the country. There is a
higher demand especially for agricultural machinery, three wheelers,
motor-cycles, tractors and solar panels in these areas.
Therefore, it is worthwhile to identify these new market segments and
there are many leasing companies who have already expanded their
services to meet the rural community’s transportation needs,” he said.
“With the dawn of peace, many development projects have been already
implemented in the Northern and the Eastern provinces. It has also
created many market opportunities for leasing organisations to expand
their business,” “Unlike earlier, the industry is quite competitive
today and we have to find innovative ways to reach customers. Therefore,
being customer-oriented is essential to sustain in the business.
There is no uniform strategy to be employed in the leasing industry.
However, the leasing industry is more focused on recovering the
advances. It is essential to keep a close rapport with clients and take
timely action,” said Silva.