Economic situation to improve:

Leasing professionals need theoretical knowledge

Harshini PERERA

Sri Lanka's economic situation will be favourable to the finance and leasing sectors in the future.

There will be a demand for vehicles, equipment and machinery used for agricultural, plantation and transportation sectors as there is better access to the North and East areas, Leasing Association of Sri Lanka (LASL) Chairman Sanjeewa Bandaranayake told Daily News Business.

The leasing industry lacks the proper, standard and structural method of educating professionals.

Professionals need to equip themselves with theoretical knowledge in the legal system, transactions and valuation.

The valuation of vehicles is done by a third party and the leasing companies should not be dependant on third parties, he said.

The number of vehicles imported to Sri Lanka has declined drastically, directly affecting the leasing industry. The lack of medium-term funding has affected the leasing industry since the interest rate is fixed for the leasing period. Therefore, leasing companies find it hard to add funds to the industry, Bandaranayake said.

Leasing companies may not be able to find a secondhand market for the equipment once leased. Equipment in the plantation sector are difficult to resell.

Unlike motor vehicles, machinery is not registered with any Government institution causing difficulties to the leasing industry in tracking the owners of machinery, he said.

He said along with the reduction of bank rates, leasing companies too have to reduce the rates to reflect market rates.

LASL and the Finance House Association (FHA) are trying to build a vision for the industry for the economy's betterment, he said.