Goldberg, Mike2012-08-132012-08-132008-12https://hdl.handle.net/10986/10265As their businesses grow, many microbusiness owners would like to purchase new machinery from a microfinance institution (MFI), since such equipment can hold the key to increasing production. However, MFIs are often not able or willing to lend for longer periods of time, with grace periods that long term lending for machinery requires. Long term financing from other sources is usually not feasible, since banks and leasing companies require collateral, a well-documented credit history and financial statements. For many microbusinesses, leasing could provide an effective alternative to taking on more debt. This note reviews financial and operational leasing, describes two microleasing experiences in Latin America, identifies risks, and provides recommendations for launching a micro-leasing program.CC BY 3.0 IGOASSET VALUEBALANCE SHEETBALLOON PAYMENTSBANKING REGULATIONSBANKSCAPITAL NEEDSCASH FLOWCASH PAYMENTCOLLATERALCOMPANYCONSUMERCONSUMER LOANSCORPORATIONCREDIT HISTORYCREDIT PRODUCTSDEBTDEFAULTED LOANDEPOSITDEPRECIATIONDEVELOPMENT BANKDISTANCE LEARNINGDOWN PAYMENTSECONOMIC DOWNTURNECONOMIC MANAGEMENTEQUIPMENTEQUIPMENT LOANEXPOSUREFARMERSFINANCE CORPORATIONFINANCIAL DISADVANTAGESFINANCIAL INSTITUTIONSFINANCIAL LOANFINANCIAL PRODUCTSFINANCIAL SERVICESFINANCIAL STATEMENTSFINANCING INSTRUMENTFIRMSFIXED RATEGOVERNMENT POLICIESGRACE PERIODSHOLDINGHOUSING FINANCEINFLATIONINSTRUMENTINSURANCEINSURANCE POLICIESINTEREST RATEINTEREST RATE CEILINGSINTERNATIONAL DEVELOPMENTINTERNATIONAL FINANCELEASINGLEGAL DISPUTESLEGAL POSITIONLENDERLETTERS OF CREDITLIFE INSURANCELOANLOAN PORTFOLIOLOAN PORTFOLIOSLONG TERM FINANCINGMAINTENANCE COSTSMARKET DISTORTIONSMFIMFISMICRO BUSINESSMICROFINANCEMICROFINANCE INSTITUTIONMICROFINANCE INSTITUTIONSMONTHLY PAYMENTNATURAL DISASTEROPERATIONAL COSTSREGULAR PAYMENTREGULATORY CONDITIONSREGULATORY FRAMEWORKRENTSREPAYMENTREPOSREPOSSESSIONRETURNRETURNSRISK MITIGATIONSECONDARY MARKETSENIORSHOPSSMALL ENTERPRISESSOLVENCYSUPPLIERTAXTAX ADVANTAGETAX ADVANTAGESTAX BURDENTAX CODETAX CODESTAX LAWSTAX SAVINGTAX SYSTEMTAXABLE INCOMETRUST FUNDWAREHOUSEWORKING CAPITALWorld Bank10.1596/10265