Leasing Services In Ukraine
by Walter Prochorenko
Part of the problem is the mentality of the Ukrainian business person who to date still do not understand the leasing concept. Another problem is that endemic of many Ukrainian businesses, and that is to try to circumvent the system or to get rich quick.
It often sounds like "crying wolf" or "sour grapes", but Ukrainians are not great at returning loans if they can help it. They borrow easily but when the time comes to pay back, it's another story. This is why there are also so many bank loan defaults in Ukraine. Another problem is the huge interest rates charged for all these loan and leasing services. At 30 to 70% (and in some cases even higher) annual interest rates, who can really afford to return loans.
Another problem with the leasing concept, has been the lack of maintenance of equipment on the part of the lessee. Ukrainians do not have a great history of good maintenance practice. The leased equipment is often destroyed after a short period and even if the lessor is able to obtain his equipment back, it is often not in the best of shape to be re-leased or sold.
Until there is a re-education of the farmers, business people, and consumers in general about leasing, obligations, maintenance, etc, the leasing concept in Ukraine is not likely to take off.
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