Better than Buying, Rent

Leasing is growing as an ideal financial instrument to dispossess of assets while incurring lower costs and obtaining financial benefits.

Thursday, June 18, 2009

In El Salvador, the usage of this mechanism has increased since 2002 when the Financial Leasing Law, which set clear leasing rules, was approved.

In these times of financial crisis, when access to credit has become more and more difficult for businesses, the leasing of production assets such as transportation, machinery, computer equipment, and full payment with cash rather than increasing debt permits businesses to designate available working capital to other purposes while reducing financial and tax liabilities.

In an article in Elsalvador.com, Alejandro Aparicio, administrator and business manager at Valores Agroindustriales, says that "the culture of leasing is well positioned because now clients are not as concerned with acquiring ownership of the goods that they are using, but rather they will just pay for the use of the asset."

More on this topic

Central American Banks: Special Report

September 2011

Fitch Ratings has issued a special report entitled, "Central American Banking: After the Crisis, a Disparate Evolution"

In Fitch's opinion the banks have shown a mixed performance in Central America during the period of the global financial crisis. At the same time, banking systems have dissimilar perspectives on future performance, reflecting different economic growth prospects in the region.

Nicaragua: Credit Card Usage Drops

April 2009

During the first quarter, Credomatic recorded a decline of 3% in credit card use with respect to the same period in 2008.

Credomatic is the strongest participant in the Nicaraguan credit card market with 150 thousand customers, and it processes 70% of the total transactions in the country.

Salvadoran Banking Profits Down 13%

March 2009

In 2008, banking generated $128.3 million in earnings, $19.7 million less than the $148 million generated in 2007.

The statistics reported by the Salvadoran Banking Association indicated that the Industrial Bank was the one that had the most earnings last year, but it suffered a drop of $10 million in profits.

Fitch Ratings Special: Central American Banks

February 2009

From abundance to scarcity: Challenges faced by Central American banks in an environment of tight liquidity.

After having been hit hard by the US mortgage crisis in 2008, large US and international banks have considerably weakened, in some cases escaping from bankruptcy only thanks to strong government intervention.

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