The Role of Lease Financing in Bangladesh

Introduction Charter costs is analogously a new abstraction in the banking area and has got acceptance as aninnovative antecedent of accounts for accelerating the clip of industrialization as able-bodied as bread-and-butter advance of Bangladesh. Leasing companies accept registered abundant advance in charter costs during the year 1985through 1994. Since 1995 to date, advance in charter bazaar has decidedly slowed bottomward because of sluggisheconomic activities, abandonment of incentives by the government, artifice of banknote ability requirementwith Bangladesh Bank as per Accounts Act 1998, amplification of cardinal of leasing institutions, abridgement of diversification of account and of acquaintance in business association about leasing etc. Researchers accept alsofound that leasing companies charge to advance their professionals and should appear in the bazaar with newmarketing strategy. Background Bangladesh is a atomic developed country in the apple with per capita GDP Tk. 11. 284 (USD 230). She suffersfrom poverty, blemish in both, agency and artefact market, connected in calm in the economy,defective authoritative anatomy in both banking and non-financial sector, inappropriate tax structure,heavy assurance on abetment from Apple Bank including alternative All-embracing Lending Agencies andDonor Countries, abridgement of basic stock, massive unemployment, political agitation and ailing environmentfor investment. With the actualization of Bangladesh as an absolute country in 1971, the thenGovernment nationalized all bartering Banks with the achievement of accelerating automated advance throughfinancial, budgetary and alternative supports. Since the birth of absolute Bangladesh, Bartering Banks,Development Banking Institutions and Advance Corporation of Bangladesh accept been the above sourcesof automated accounts in the country. These Banks were predominately confined the accessible area by extendingsupport in the anatomy of continued appellation loan, alive basic finance, arch accounts etc. and had bound experiencein trade, business and industry. Due to absence of acquaintance in advance decision, activity financing,recovery of accommodation and recycle of loan, both entrepreneurs and Banking Banking Institutions accompanying withdifficulties at every date of development and ability which ultimately led to the actualization of many ailing industries. The Development Banking Institutions (DFI s) that depend abundantly on alien abetment ache fromfinancial constrains because of abortive activity appraisal. Imprudent advance decisions, poor recoveryand disability to recycle of accommodation which resulted in abandonment of armamentarium by all-embracing donors. As a aftereffect of poor achievement and abandonment of alien support, the clamminess position of DFI s accept beneath and abilityof acceptance beginning accommodation and of refinancing ailing industries reduced. Nationalized bartering Banks areusually afraid to accounts basic amount due to college banking accident and poor accretion and designedto advance the barren sectors. Besides, their accommodation operation was essentially beneath due toadditional banknote assets claim imposed by Bangladesh Bank in adjustment to barrier inflation. Consequently,genuine automated audience are afflicted by their bound admission to the abiding bounded bill loan. Thiscontention is axiomatic from the actuality that the clandestine area charcoal in massive absence to the DFI s and NCB s,90% of borrowers to DFI s are in behind and accretion ante are as low as 10% of the absolute recoverableamount. On the alternative hand, Dhaka Banal Exchange (DSE), the alone banal bazaar of Bangladesh is not wellorganized and accordingly bootless to activate acceptable armamentarium to accommodated the appeal of the basic bazaar of thecountry. During 1972-84, accessible area banking institutions were begin absolutely abortion in developing industrialsector and announcement aboriginal bearing of automated entrepreneurs

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