Latin American equipment leasing soars

The increase in demand for finance is outstripping economic growth, with the International Monetary Fund estimating that the overall economic growth rate in Latin America was just 1.1% in 2016, mainly due to declines in Brazil and Venezuela.

However, emerging economies in the region are seeing growth rates of 4-5%, which is good news for the equipment finance sector.

According to the Alta LAR 100, which estimates leasing portfolio sizes and growth rates throughout the region, Argentina, Colombia, Chile, Mexico and Peru are key growth markets, with negative growth in Brazil, Ecuador, Puerto Rico and Venezuela.

Rafael Castillo-Triana, CEO of report author Alta LAR, said: “We have surveyed close to 600 active lessors in the Latin American Region.

“About 95% of the whole leasing portfolio is concentrated in the 100 largest leasing companies with around US$ 55 billion. These 100 largest lessors experienced an annual growth of 11%, which is more than 2.5 times the average growth of the whole industry in the region.”

The report identifies strong growth for independent lessors, a decline in finance leases while operating leases grow and reduced portfolio sizes of bank-owned lessors.

The Alta LAR 100 also indicates a shift in ownership of Latin American leasing companies, formerly dominated by US lessors but now controlled by European, Asian and Canadian investors joining dominant indigenous groups.

For further details on the Alta LAR 100 Report, visit http://thealtagroup.com/lar-100-report-2017/