New challenges in growing time.Perspectives of leasing in Uzbekistan

by Mr. Zafar Mustafaev,

CEO of Uzbek Leasing International

General Director of Association of Uzbekistan Lessors

Progress of leasing in Uzbekistan

1993 – National airline of Uzbekistan purchased via leasing 10 airplanes (Boeing, Airbus, RJ)1995 – establishment of the first leasing company “Uzbek Leasing International A.O.”1999 – adoption of the Law “On Leasing”2001 – creation of the Working Group with participation of IFC’s Leasing Project for improvement of leasing legislation in Uzbekistan2002 – The Presidential Decree on measures for further stimulus of development of leasing2003 – amendments to the Economic Procedural Law of Uzbekistan on the issue of the leased asset repossession2004 – resolution by the Cabinet of Ministers of the Republic of Uzbekistan on accelerated depreciation during the leasing2005 – established the Association of Uzbekistan Lessors2006 – The Presidential Decree on developing of services industry

www.leasing.uz

Why Leasing

Technological equipment imported for leasing is exempt from VAT and customs dutiesObject of leasing are exempt from the property tax Lease payments released of VATTaxable income of the Lessee is reduced for the amount of interest on lease. Lessee deducts all the interest amount (lessor’s income) regardless of the leasing periodOpportunity of use of accelerated depreciationLeasing services exempted from profit tax until April 01, 2009

www.leasing.uz

What we have today?

Volume of internal leasing in million USD

34.925.5 27.9

36.6 40.5

6.5

12.415.5

44.9

67.1

-

20

40

60

80

100

120

2002 2003 2004 2005 2006

Uzselkhozmashleasing other lessors

www.leasing.uz

Which sector is more important for the Lessees ?

Types of equipment, given on lease basis(all lessors, excluding Uzselhozmashleasing )

www.leasing.uz

manufacturing equipment

27%

other0.3%

computer & office equipment1%

medical equipment1%

real estate13%

passenger vehicles10%

trucks3%

other14%

construction9%

printing5%

agricultural machinery32%

light industry8%

food production4%

Who are the players on Uzbekistan leasing market

Lease CompaniesAsia – Europe Trust Company Association of Business Women of KarakalpakstanAsaka-Trans LeasingBaraka LeasingBusiness LeasingExpress LeasingKurilish LeasingPoytaht LeasingUzbek Leasing International AOUzagrocaseleasingUzselhozmashleasingUzavialeasingUzavtosanoatleasingZamin Invest

BanksAloka BankAsaka BankCapital BankGalla BankIpak Yuli Bank Ipoteka Bank NBUPahta BankRavnak BankSavdogar BankMicrocredit BankTuron BankUzpromstroybankUzKDBankKhalk BankKhamkor Bank

www.leasing.uz

Uzbekistan Lessor’s Association

Uzbekistan Lessor’s Association was established in 2005

• Mission - to create conditions for development of leasing services in the Republic of Uzbekistan for effective realization of economic reforms implemented in Uzbekistan.

There are 19 members in Association: Asaka-Trans Leasing Asia – Europe Trust Company Baraka Leasing Asaka Bank Business Leasing Capital Bank Express Leasing Ipak Yuli Bank Kurilish Leasing Ipoteka Bank Poytaht Leasing Pahta Bank Uzbek Leasing International AO Microcredit Bank Uzselhozmashleasing Hamkor Bank Uzavialeasing Zamin Invest Uzavtosanoatleasing

www.leasing.uz

First Leasing Company Operations on the leasing market since 1996 Paid-up capital USD 6 million Solid shareholders:

15 % 35 %

15 % 35 %

Over 140 projects has financed and total amount of USD 25 million Internal funds, credit lines from NBU, IFC, EBRD, CDB and export

credit agency

www.uzbek-leasing.com

Portfolio Structure – Industry Sectors

www.uzbek-leasing.com

Portfolio structure based on the industrial sectorsAgriculture

1%

Wood processing6%

Food processing36%

Services14%

Construction materials

8%

Poligraphy16%

Chemical industry3%

Lightindustry

16%

Portfolio Structure – Project Size

www.uzbek-leasing.com

31%

49%

12%9%

1%

0%

10%

20%

30%

40%

50%

from 100th USD

from 100th to300th USD

from 300th to500th USD

from 500th to1mln.USD

more than 1mln.USD

in % from number of projects

Portfolio Structure – Supplier Countries

www.uzbek-leasing.com

Italy7%

Taiw an3%

Ukrain1%

France1%

Israil2%

Bolgaria 1%

Pakistan1%

Hungary1%

Slovakia1%

Ireland1%

Syria1%

Belgium3%

China3%

Sw eden1%

Syngapure1%

Uzbekistan30%

USA7%

Austria2%

Belarussia3%

Turkey10%

Russia12%

Germany7%

What equipment is most wanted in Uzbekistan?

Compact and mini-technological equipments for small and private entrepreneurship

Car leasing Cotton spinning and textile industryProcessing of agricultural productsConstruction equipmentSpecial vehicles, trucks and busesTelecommunication

www.leasing.uz

Why Leasing in Uzbekistan?

One of the best legislative bases on leasing in the world: Simplified system for registration and taxation of

leasing companies Leasing activity is not licensed Availability of tax allowances and preferences

Big demand for leasing services

Leasing is high profitable financial facility

Our address:

Tashkent city, 100003 Republic of Uzbekistan

4th Floor, International Banking & Finance Center

1, Turab Tula Street Tel.: (+998 71) 114 64 46 (+998 71) 114 64 44 (+998 71) 139 16 54 (+998 71) 132 62 94 Fax.: (+998 71) 120 67 29

E-mail: uzlease@sarkor.uz www.uzbek-leasing.com