The NBS Head Office Building was built from 1888 – 1890, on the basis of blueprints designed by Konstantin Jovanovic (Vienna 1849 – Zurich 1923), son to distinguished artist Anastas Jovanovic...
The leasing industry in the modern sense was developed in the 1950s in the USA. In the territory of Serbia, financial leasing operations were legally regulated by the provisions of the Law on Financial Leasing adopted in May 2003. Amendments and Supplements to this Law, whereby the National Bank of Serbia became the institution that issues licenses for the performance of financial leasing operations, grants approval for naming management bodies, supervises lessor’s operations, and undertakes corrective measures, were adopted in July 2005.
The lease object may be a durable good, and the minimum deadline for the conclusion of the financial lease contract is two years.
The ownership of the lease object, over the whole term of the financial lease contract belongs to the lessor , and this contract may envisage the option right, i.e. the right of the lessee to purchase the lease object upon the expiry of the contract. The lessee has the right to use the lease object unimpededly during the validity of the financial lease contract, to derive all benefits from the object, and to bear all risks and costs arising from the ownership right, although he/she is not the owner of the object in the formal and legal sense.
Financial leasing represents one manner of financing investments into fixed assets, or movable durable goods, and is the alternative to own funds, banking credits and borrowing through the issue of debt securities. This manner of financing is often compared to banking credits as they have similar characteristics (repayment at predetermined installments, interest, manner of bookkeeping...). However, the most significant characteristics of financial leasing compared to other forms of financing are the following:
Leasing is a very important manner of financing the economy. The best indicator of the importance of leasing is the rate of investment share in fixed assets financed through leasing in total investments in fixed assets of an economy. According to Leaseurope data for 2004, this rate touches even 24% (in Great Britain and Ireland), witnessing a constant upward trend since 2000. The share of leasing in the provision of fixed assets in countries of central and eastern Europe is also substantial, averaging at 18.5%. Since this is a new form of financing in our country (the greatest number of lessors was founded in 2003), this indicator for 2004 in Serbia stands below 4%, according to some estimates.
Financial reasons. The key advantage of financial leasing in relation to other forms of financing stems from the lessor being a formal-legal owner of the lease object over the term of the lease contract, which enables him to run a greater risk in terms of potential client’s creditworthiness. This type of financing is therefore adequate for newly founded, small and medium-sized enterprises, entrepreneurs and all users with a weaker credit worthiness, i.e. the users who do not dispose of means they could offer in the name of securing the loan. Namely, the lessor brings the decision on the approval of financing not only on the basis of the user’s creditworthiness (which is a dominant factor when deciding on the approval of a banking loan and determining the securement funds required by banks), but also on the basis of the estimate of the level of marketability of the lease object, i.e. the possibility of selling the object in the market easily and at a realistic price.
Simpler procedure. The procedure of granting the approval of financing is most often shorter compared to traditional financing forms. The reason lies in the fact that additional securement funds (e.g. mortgage) are most often not required, and lessors often have a business cooperation with suppliers of lease objects. All this leads to total reduction in transaction costs.
Rights, obligations and responsibilities of the lessor:
Rights, obligations and responsibilities of the lessee:
Rights, obligations and responsibilities of the supplier of the object:
Financing procedure through financial leasing:
The Business Registry Agency keeps the financial lease registry in line with the law. The financial lease registry opened on January 4, 2004 and it represents a unique centralized electronic database containing data on the financial lease contract, amendments and supplements to these data, notes of disputes regarding the lease object and the termination of the financial lease contract.
The lessor is obliged to submit the request for the entry of the financial lease contract within 7 days following the day of the delivery of the lease object, or the request for the entry of amendments and supplements to financial lease contract data, as well as the deletion of data from the registry within 7 days following the moment of the occurrence of facts causing the amendment, supplement or the deletion of data. The said requests may also be submitted by the lessee, if specified in the financial lease contract.
The purpose of the existence of the registry and entry of the financial lease contract in the registry is the availability of data on concluded lease contracts (and lease objects) to the general public. The entry of the financial lease contract into the registry implies that third persons are acquainted with the existence of the lease object and that no one may claim that they were not familiar with financial leasing data entered into the registry.
Data entered into the registry do not represent a proof of the existence of property or other rights over the lease object, nor of the validity of any legal business. All data entered into the financial lease registry are available on the internet page of the Business Registers Agency.