Silvana Trickovic, chairman of NBG Leasing Executive Board – Where is Serbia on the European leasing map?

(Silvana Trickovic)

With Q3, the NBG Leasing company covers more than 8% of the market with the profit of more than EUR 600.00. Strategically set goals, long-term strategic partnerships with suppliers, opening of new agricultural equipment sales channels are, as they from the company say, the starting points which enabled NLB Leasing in times of the economic crisis to record satisfactory placement in new business and constant profitability.

Silvana Trickovic, who has been heading NBG Leasing successfully for ten years speaks about the leasing situation in Europe and Serbia as well as about potentials of Serbia in the next year.

eKapija: What is current situation at the European leasing market and to what extent has leasing influenced European economies?

- Leasing industry is first of all important support to total European investments, not only as a funding source but as a tool for future growth and development. During 2012, over EUR 250 billion of new investments supported leasing companies of Europe. A total placement in 2012 generates a fall of 2,6% compared to 2011 but we are still witnesses of extraordinary contribution of leasing industry to development of economies of many European countries, especially Germany, France and Great Britain. Mediterranean and the Balkan countries to the largest extent record a fall in new placements in leasing in all categories. The structure of new placements indicate a drastic fall of real estate funding of over 30% compared to 2011 but on the other hand, funding of equipment and vehicles records a growth of 0,6%. It is natural and logical that the leasing industry stagnates with a slight fall of the European GDP in 2012. There are similar tendencies during 2013 as well.

However the European leasing market is looking for space for recovery in the upcoming period through innovations, cost optimization and funding sources diversifications.

eKapija: What is the position of Serbia at the European leasing map like?

- Serbian leasing market is still suffering huge economical crisis consequences. With placements between EUR 250- 300mil, a couple of years back, the Serbian leasing market present 0, 1% leasing market of Europe. Decreased scope of business and liquidity of economy generally speaking, reflects on business operations leasing companies in Serbia. Still, it should be pointed out that the average rate of uncollected debts in the leasing industry of Serbia totals between 13% and 15% which is far lower than the average rate of uncollected debts in the banking sector which at this moment exceed 25%. .

The data indicates the quality of placement in the leasing industry and the importance of the ownership role when it comes to risks leasing companies take over on themselves.

Business results and profitability of some leasing companies point out that there are companies which respond to market trends quickly, control costs and succeed in maintaining their portfolio quality. Future development of leasing industry directly depends on recovery speed and degree of recovery of Serbia. Economy recovery will increase investments and leasing is the most adequate instrument for the support of economic activities. Potential tax legislation changes and service innovations generate new space for development of the overall field.

eKapija: In European Union, leasing presents the prevailing SME’s funding option. To what extent has Serbia used this kind of financing option?

- It is known that SMEs are the leading force of the economic development of an economy. They stimulate private initiative and entrepreneurial spirit. They are flexible and quickly adapt to market changes. Over 40% of SMEs in Europe use leasing as the prevailing funding source. Governments of many countries support leasing as a method of support of SMEs because it is about companies which cannot get to funding sources easily. Upon loan approval, business banks usually ask for additional security assets which are an additional burden for entrepreneurs. Since leasing companies are actually the owners of leasing subject, they already have security assets.

Businessmen come to the equipment through this financial option and they can split costs into the whole period of leasing contract. This kind of an approach in business facilitates budget forecasts for the upcoming period and liberates capital of businessmen for some other investments.

In Serbia, SMEs make over 98% of total number of companies which employ two thirds of people. It is a fact, however, that leasing as the economically most remunerative solution for funding procurement of equipment for SMEs has not been exploited in Serbia to the fullest. To change this kind of situation, education of entrepreneurship about this funding option, support of the state and improvement of legislation framework which would enable this financial product becomes more attractive.

eKapija: What can be done in order to develop leasing in Serbia? Is it innovations?

- Absolutely. Innovations are something completely new and significantly better than what we have now in leasing. There is space for innovations in sales channels, in marketing, in pricing models, in IT systems. I think that it is necessary to allocate additional energy in the staff as well which will be directed towards creation of new values, not for justification of potential losses using difficult economical situation.

Serbia has always been a culture where ownership over property has been forced. Look at the world. More attention is paid now to usage and access to the property than to ownership over the property. A total of 52% of the Americans rented loaned or leased property from other people or companies. A total of 83% them say that they would do it again. Over USD 3,5 billion will be the profit this year in the world only from renting.

Today in the world, there are platforms where every individual can offer his or her vehicle for a short-term lease to tourists who are planning to visit their town for a couple of days. Can we imagine Serbia like that? Can we imagine companies and individuals in Serbia, to a large extent, renting property to one another or equipment, knowledge, services? Everything is possible and presents a serious financial savings for every company.