Leasehold Financing: A Recent Evolution

Leasing business has good prospects in India. At present, the leasing industry is growing in almost regulatory vacuum. But, the regulation of these companies is necessary not only to protect the funds of the public and the banks, but also to place the leasing industry on a sound footing. These are found urgently wanting. The present era is known as the "survival of the fittest". So is in leasing industry also. With the advent of specialization as the key to success, it is the high time for leasing industry also to reorient itself to the very needs of the market and lay its sole emphasis on market responsiveness. This is what is called professional outlook. In the US, which has the largest leasing industry in the world, lease financing contributes to approximately one fourth of total business investment. In India, leasing business gained momentum only after 1983. Lease financing has become very popular in India and in western countries. There is evidence that the pressure of competition is already building up and lease rentals have declined. Despite its rapid growth in India, leasing has so far contributed to only a small proportion of the business investment. It is expected that the business of the leasing companies will grow fast and they will be able to make a significant contribution to total business investment in India.