Future of Leasing in Thailand

Topics: Bank, Bangkok, Commercial bank Pages: 2 (590 words) Published: February 5, 2013
The Future of Leasing
Based on the analysis of Vinod Kothari (1998), leasing was a potential boon for small and medium-sized businesses in Thailand. In his web site, an article published on Bangkok Post in 1998 and the Research Department of Bangkok Bank provided bright, positive future for local leasing business due to curtailment of credit by commercial banks and other financial institutions as a result of financial crisis. Kothari (1998) further stated that the percentage share of credit extended by leasing companies had escalated more rapidly than the ones granted by other financial institutions. Percentage share of leasing soared from 0.2 percent in 1988 to 1.18 percent in 1995 – a fivefold increase in credit extension relative to that of Small Industry Finance Corporation. Between 1988 and 1995, leasing volume elevated by an average of 62.7 percent annually, compared with the average annual increase of 25.6 percent in credit extended by four financial institutions during the same period. Moreover, the Bank of Thailand ("Commercial bank credits," 2012) statistics illustrated that there was a significant increase in financial leasing from 364,625 million baht in the second quarter of 2011 to 474,047 million in the third quarter of 2012, approximately 30 percent increase over a year. During the same period, however, vehicle and equipment leasing grew from 16 billion baht to about 23 billion, while asset leasing soared from 98 billion baht to 131 billion. Thus, it is reasonably conclusive to assume that there is a positive, growing trend of leasing in Thailand as portrayed by 1998–1995 and Quarter2 2011–Quarter3 2012 statistics due largely to the recovery of Thai and Asian economies.

Conclusion (You can delete the title)
Leasing is worthy of attention as Harvey Lieberman and James Smith (1976) stated: “A more important advantage to leasing is the conservation of working capital. Neither a cash outlay for outright purchase of an asset nor a down-payment...
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