Inclusion of locally manufactured machinery in non-banking financial companies (NBFCs) would help broaden the base of leasing companies and would help enhance latter's presentation in the SME sector. The Leasing sector of the country is entering multiple financial activities covered under the NBFC regime in order to achieve diversity of their business and earnings. This was the main consensus among the members of the Leasing Association of Pakistan who assembled at Karachi for their Ninth Annual General Meeting.
"Any financial institution relying mainly on a single product or service would not be able to meet the challenges being offered by the universal banking environment,", Basheer Chowdry, Chairman, LAP, emphasised in his annual review.
He warned that those who are slow to act in diversifying and taking full advantage of the NBFC regime in order to multiply their operational activities are bound to suffer.
Reviewing last year, Chowdry said that the year was marked with an intense competition from commercial banks.
This led to the strategic shifting of the leasing sector towards small and micro leasing, extension of outreach of some members to smaller towns, introduction of new products and services and initiation of leasing in the agricultural sector.
He complemented the leasing sector for taking a realistic and courageous view of market realities and implementing strategic plans which not only met the challenges of the competition but also increased the real business volumes.
Consequently, the collective assets of the leasing sector increased from Rs 77 billion compared to the previous year's Rs 71 billion.
Significantly, the profits increased from Rs 1.717 billion to Rs 1.990 billion.
He summarised the activities of the Association which encompassed training seminars, human resource development, delegation sent abroad for various operational purposes, setting up of a confidential National Leasing Register and record of the Defaulters' Data.
The State Bank of Pakistan included for participation of NBFCs in the Scheme for Locally Manufactured Machinery.
The Scheme is aimed to promote the SME Sector and pass on cheaper financing and leasing facilities for the users of local machinery. This would open a fresh window for resource mobilisation for the leasing sector and help them enlarge their presentation in the SME Sector.
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