ACBA Leasing East - Agri 2006

ACBA LEASING I.Why an initiative for leasing activities in Armenia ? Credit is too much expensive in emerging markets Leasing may create sustainable economic development by increasing demand for investments Successful experiences in other emerging markets : Lebanon, Polan…)

II.Conditions for setting up leasing activities in Armenia Elaboration of a feasibility study and business plan –Analysis of potential markets and assessment of demand –Clarification of the legal, fiscal and accounting environment Participation of a local operator, having important financial resources and a confirmed credibility Important technical assistance funded by international donors An important shareholding capital of the leasing company to be created ACBA LEASING

III.Start up of a company Creation of the company : –date of the establishment : April 25, 2003 –Share capital: U$ represented by 100 shares Funding and technical assistance –Loans up to 4U$ millions distributed by IFC and Calyon –Cooperation with ACBA Bank  ACBA Bank branches attract more than 30% of the leasing deals, the activity of ACBA leasing allowed to open about 100 new accounts in the books of ACBA Bank  Commission fee paid to ACBA Bank ACBA LEASING

–Cooperation with Credit Agricole Group (CAC)  A resident advisor  Training courses –Cooperation with DAI  Budget of Technical Assistance  Seminars ACBA LEASING

IV.Main characteristics of the deals General conditions of lease deals : –Annual flat rate: 11 – 13% –Minimum lease period (6 months) and maximum (60 months) –Monthly payments –Imperative insurance –Registration of assets with Cadastre –Average prepayment of 25% of the cost of equipment Main objects of leasing: –All fixed assets and equipment preferably with long technical amortization period –Easy recognizable, easy transferring and easy reselling assets ACBA LEASING

V.The results As of the end of 2005, 180 contracts have been signed, representing: –588 pieces of equipment –A value of 8 U$ millions The structure of the lease portfolio is as follow: –Agriculture: 10,8% –Industry: 32,5% –Trade and services: 56,6% Excellent financial results: –Net Incomes: A.DRAMS (≈ 369 US$) –Profit 2005: A. DRAMS (≈ 273 US$) –Total balance sheet: A. DRAMS (≈ US$) ACBA LEASING