Lease Financing of Bangladesh: A Descriptive Analysis
International Journal of Economics, Finance and Management Sciences
Volume 2, Issue 1, February 2014, Pages: 33-42
Received: Dec. 10, 2013; Published: Jan. 10, 2014
Views 2638      Downloads 343
Authors
Md. Ariful Islam, BASIC Bank Limited, Khulna, Bangladesh
Md. Rayhan Islam, Business Administration Discipline, Khulna University, Khulna-9208, Bangladesh
Mahmudul Hasan Siddiqui, Unilever Bangladesh Limited, Gulshan-1, Dhaka-1212, Bangladesh
Article Tools
PDF
Follow on us
Abstract
Leasing industry is one of the flourishing sector of Bangladesh. The leasing companies on the average are doing pretty well since inception in this country. Leasing has gained its popularity for several reasons. The first and most important of all is that leasing can be thought of as an alternative source of fund which is most of the cases cheaper, and for the companies which don’t have a high credit rating or a visible positive past track record, this may be the main source of financing. Another thing is, lease is an alternative to investment. If you need a particular asset for running or expanding your business, you may choose to lease it rather than purchase it. And you can cancel the lease options in the face of changing macroeconomic factors, such as obsolescence, new technologies, changing business needs or market conditions etc. Lease is nowadays treated by the developed markets as a provider of 100% financing and they have a notion that lease displaces debt. Leasing actually reduces the leverage needs of a firm. We can understand that the leasing market is still very small in Bangladesh and the actual potential market is highly untapped. Since people are not well aware of different types of lease products, they look for other alternative before leasing. But now it’s time for us to break away from tradition and utilize leasing in our businesses fully so that we can realize its benefits. We believe that leasing sector in Bangladesh will grow, as people become more knowledgeable and more willing to look for alternative sources of financing.
Keywords
Leasing, Industry, Leverage, Bank, Financial Institution, Finance
To cite this article
Md. Ariful Islam, Md. Rayhan Islam, Mahmudul Hasan Siddiqui, Lease Financing of Bangladesh: A Descriptive Analysis, International Journal of Economics, Finance and Management Sciences. Vol. 2, No. 1, 2014, pp. 33-42. doi: 10.11648/j.ijefm.20140201.15
References
[1]
Altman, Edward Handbook of Corporate Finance, John Wily and Sons, New York, 1986 pp11-41.
[2]
Choudhury, A. Quadir, "Leasing in Bangladesh- An Overview", The Bangladesh Observer, 1999, December 03, Dhaka.
[3]
Anderson, Paul, F. and Martin J. D. "Lease vs. Purchase Decision: A Survey of Current Practices", Financial Management, Vol.6, Spring, pp.1979, 41-47.
[4]
Choudhury, T. A. "An evaluation of the performance of commercial banks in Bangladesh", Ph.D. thesis. 1990.
[5]
Clark, T. M. Leasing, McGraw Hill, London, 1976.
[6]
Cooper, R. A. and A. J. Weeks, Data Models and Statistical Analysis, Haritage Publish, New Delhi, India, 1983, P-400.
[7]
Fabozzi, Frank J. Equipment Leasing –A Comprehensive Guide for Executives, Dow Jones – Irwin Inc., USA, 1981, P-248.
ADDRESS
Science Publishing Group
1 Rockefeller Plaza,
10th and 11th Floors,
New York, NY 10020
U.S.A.
Tel: (001)347-983-5186