The market of leasing services increased by 56% in 2020

ArmInfo. The volume of the leasing services  market in Armenia for 2020 increased by 56.1%. According to the  Financial Analytics Service of ArmInfo IC, during the last year the  volume of the leasing market increased to 47.6 billion AMD or $ 91.1  million.

As analysts of the Agency note, the growth of leasing transactions  has significantly increased both in the country's banking system and  in the portfolios of credit companies. 7 out of 17 banks operating on  the market provide leasing services. The market leader is ACBA Bank,  whose leasing portfolio, according to the consolidated balance sheet,  calculated taking into account the specialized company ACBA Leasing,  at the end of 2020 amounted to 26.2 billion AMD, 23.0 billion of  which falls on the company. The second place among banks is taken by  Ameriabank with a portfolio of 15.7 billion, the third is  Armswissbank with the amount of 1.6 billion. Artsakhbank follows next  (AMD 700 million), Converse Bank (AMD 600 million), Araratbank (102.5  million) and VTB Bank (Armenia) with a portfolio (61.7 million).  Other banks are still refraining from providing leasing services. And  nevertheless, despite the activation of the market, while the share  of leasing in the total portfolio of banks is negligible - 1.41%.

As for specialized leasing companies, in addition to the traditional  leader in the person of ACBA Leasing, Agroleasing company actively  operates on the market, whose portfolio as of Dec 31, 2020 amounted  to a little over 1 billion AMD and the Armleasing company, which  opened a year ago, which managed to collect a portfolio of 792  million AMD.

According to market analysts, high rates of leasing development in  Armenia are associated with several factors. Firstly, the government,  after a long stalemate, in 2018 managed to pass through parliament a  number of important decisions related to neutralizing factors  hindering the development of the market, including in the field of  taxation, reporting and legal aspects that turned leasing from an  instrument aimed at modernizing fixed assets into a sometimes  unprofitable financial instrument of commodity credit.  Secondly, the  market was strongly spurred by the position of the government, which  has developed several programs to subsidize rates for leasing  agricultural equipment and machinery, aimed at urgent modernization  of the agricultural sector and agricultural processing.

According to analysts, there has long been a high deferred demand for  leasing services in the country, the growth rates of which, most  likely, will continue to grow in the same proportion. It is possible  that the number of players on the market will also increase,  primarily due to the entry of other commercial banks into this  segment.