Leasing

Quite many companies were not created as specialized. However, along with the time legal, economic, organizing and other conditions motioned them to set up considerably pricy leasing contract in this or that definite segment. I.e. some lessors become for a certain time a many-segmented or narrow-segmented which enables to formally refer them to specialized companies. There appeared examples when a few specialized lessors unite into a universal company.

Some years ago, defining leading leasing company, we issued from three main criteria: leasing contracts enter into by the companies during the year in not more than three segments on domestic market of leasing services; specific weight of new leasing contract price in one of the segments should overcome 50%, in two – over 70%, in three – over 90% of all the value of all the contracted enter into by a lessor; leasing company enters into a leasing contract without any restrictions and demands to the leasing-receiver about its corporate belonging to this or that structure.

In following analytical projects on research of Russian leasing market we decided to clarify the level of validity of assessment of leasing company specialization with the help of known index Herfindahl-Hirschman (HHI). Applying to this task this index is calculated as a sum of quota squares of transferred property into leasing possession, which leasing company dealt with.

Peak value which HHI index can take is 10000. This value of index characterizes the situation when leasing company is presented in only one segment of the market. If the activity of a specialized leasing company consists of only construction and road-building equipment, then maximum that can be reached will be rather less.

By the results of 2008 all the participants of the projects we divided into three groups. Alongside with it, in the first group were universal leasing companies, i.e. lessors whose value of HHI index was no more than 2500. In the second group fell so-called universal-oriented or identical in meaning with them specialization-oriented leasing companies with HHI index from 2500 to 5000. The third group – is specialized leasing companies whose HHI index lasted on interval between 5000 and 10000.

Specialization in leasing of construction and road-building equipment and facilities means concentration of main economical activity of a leasing company on types of property which belong to this definite segment of leasing market. Work a lot of specialized and narrow-specialized (dedicated) companies in these segments. In their activities there are a lot of common but there’re, which is reasonable, several noticeable differences. How to compare such companies, how to more precisely and objectively estimate the level of their specialization? For this purpose can be used the specialization coefficient of a leasing company (K), occupied in construction and road-building equipment and facilities, that can be calculated by means of defining the specific value weight of newly made leasing contracts in these segments of leasing market. Let’s use the following formula: Ê=Ñ_ñ/Ñ_v*100, (1)

Where C_ñ – is the cost of newly made leasing contracts of construction and road-building equipment and facilities;

Ñ_v  - the cost of all newly made leasing contracts of a leasing company;

As it’s visible, the calculation formula of sought-for coefficient is quite simple and we easily can define by the results of 2008 the specific weight of construction and road-building equipment and facilities leasing in the entire amount of leasing business (table 1, column 4). We will be considering this work as first iteration in our research of specialization level of a leasing company.

 

TABLE 1

Specialization level of lessors of construction and road-building equipment and facilities(with the amount of new leasing business over 10 million dollars) in 2008.

 

 

 

Basing on the rates of 2007 and 2008 we can figure the dynamics of construction leasing out by the separate leasing companies. So for example “Caterpillar Financial” company’s specialization level has grown by 8,9% , Universal Leasing Company’s (Khabarovsk) – by 49,4%, “GRUZOBIL Leasing” company’s – by 4,1%, Centre Of Leasing Investments’ (Tyumen) – by 28,9%, GK “InterLeasing” company’s – 23,9%, “Stone-XXI” Leasing company’s – by 42,6%. Almost unchanged this index remained by the Ugorskaya Leasing company (Khanty-Mansiysk) and a few has suffered reduction of specialization. While analyzing and diagnosing lessors’ activity results it should be counted that the level of specialization of a small leasing company can be significantly higher than corresponding indication of a bigger or much bigger Russian lessor. Thus it wouldn’t be fair to be limit ourselves with only two factors, values of which are mentioned in the table 4. I believe this work should be done by several stages. Then the above mentioned results can rendered only as primary and the process itself – as a rough approximation to the achievement of a real sought-for specialization level. Really, here should be taken into account that received indices of leasing company’s specialization weakly affects amounts of dealerships in the particular segment.

That’s why I reckon that second iteration should be held in the part of valuation index forming which will let us to define the specialization level with accounting significance of construction leasing amounts of a particular leasing company in total volume of the whole construction leasing cluster in the country. For To solve the assigned task we formalize the account of aggregative index of a lessor’s specialization (I_s) in the following way:

I_s=Ñ_ñ/Ñ_v*100*Ñ_ñ/C_cn*100, (2)

Where C_cn - Cost of newly made leasing contracts of construction and road-building equipment and facilities, made in the country;

For calculating the aggregative index of leasing companies’ specialization and its ranking we’ll use information from the table 2. As we can see, two multipliers are used.

TABLE 2

Account of aggregative index of lessors’ specialization in 2008

 

Considering the results of our empirical investigation we can conclude that modeling of aggregative index provides us for creating of a three-factor account model of specialization level including multipliers which unlike the definition of specific weight of construction and road-building equipment and facilities leasing in the total volume of the new leasing business, more precisely and well-founded takes into account the index of a lessor’s work significance with concrete types of transferred into leasing possession properties.

For the realization of the following operation of a leasing company’s rating it’s quite possible their 7 group distribution in the meaning of I_s. Particularly, to the first group we could have referred the leasing companies with indication of specialization index having the minimal value – under 20 showing that this is not specialized company in the particular segment of market; to the second group we can put the leasing companies which have the value of index from 20 to 40 what indicates a weak specialization; to the third group with values from 40 to 60 meaning that these are specially-oriented companies; values from 60 to 80 – lessors with intermediate level of specialization; fifth group includes those lessors which have higher than intermediate level of specialization – from 80 to 100; sixth group unites lessors with high specialization, i.e. with values – from 100 to 200; in seventh group presented lessors with a very high level of specialization under wich the value of aggregative index I_s overcome 200.

Estimation of specialization level of a leasing company can be done on the base of information by the quantity of the entire portfolio within the payments, remained due to be paid by the leasing receivers – construction organization acting under leasing agreement.