1 BANKING SECTOR AND LEASING MARKET BUSINESS AND STATE REGULATION Kyiv, Ukraine Kyiv, Ukraine February 21, 2006

2 INTRODUCTION RANDAL PETERSEN SENIOR MANAGER – FINANCIAL MARKETS IFC MOSCOW, RUSSIA EUROPE AND CENTRAL ASIA –BANKING –LEASING –MICRO FINANCE –RURAL FINANCE

3 GAP MICRO FINANCE – POOR 10-20% GAP BANKS – SME LENDING 10-20%

4 LEASING AS AN ALTERNATIVE SOLUTION BANKS – SME 10-20% MFI POOR 10-20% LEASING 60-80% businesses 90% job creation

5 INSTITUTIONAL STRATEGIES DOWN – SCALE BANKING UP – SCALE MICRO FINANCE GRADUATES INTEGRATION OF MICRO AND SME PARTISIPATION MODEL BANK – LINKAGES MODEL

6 WHAT IS LEASING CONTRACT BETWEEN TWO PARTIES ONE PARTY PROVIDES ASSET USAGE TO ANOTHER PARTY SPECIFIC LENGTH OF TIME NUMBER OF PAYMENTS RATE OF INTEREST PARTY 1 MAINTAINS OWNERSHIP TILL PAID FINANCING OF FIXED ASSETS END OF PERIOD MAY OR MAYNOT PURCHASE ASSET

7 ADVANTAGES OF LEASING IMPROVES ACCESS TO FINANCE ASSET PURCHASED IS COLLATERAL COST MAY BE LOWER VERSUS EXISTING CREDIT TAX ADVANTAGES DEPRECIATION BENEFITS BETTER ACCESS TO EQUIPMENT AND OTHER ASSETS INCREASED FINANCING SOURCES INVESTMENT IN EQUIPMENT THAT CAN MODERNIZE PRODUCTION AND IMPROVE PRODUCTIVITY AND PROFITABILITY REDUCES MAINTENANCE COSTS – NEW REDUCED UPFRONT COSTS – FREES CAPITAL ABILITY TO PLAN ENABLES COMPANY TO MATCH INCOME/EXPENSES CAN BE TAILOR MADE TO SUITS COMPANY NEGOTIABILITY

8 IFC LEASE PROGRAM CREATE APPROPRIATE LEGAL AND TAX FRAMEWORK BUILD CAPACITY OF LEASE COMPANIES INCREASE PUBLIC AWARENESS OF LEASING CAMPAIGN CREATE OPPORTUNIES FOR DOMESTIC AND FOREIGN INVESTMENT IN LEASING

9 IFC EXPERIENCE 31 YEARS OF EXPERIENCE IN DEVELOPING MARKETS COMBINES TECHNICAL ASSISTANCE WITH INVESTMENT PROGRAMS BY IFC MOSCOW Project Name:Date Close: 1. Central Asia Leasing ProjectSeptember 30, Northwest Russian Leasing ProjectDecember 31, Azerbaijan Leasing Development Project April 30, Mongolia Leasing Development ProjectJuly 31, Ukraine Leasing Development ProjectNovember 30, Central Asia Leasing FacilityApril 30, 2008

10 Number of companies Total Outstanding Portfolio, USD Market volume for the last 3 years: $35 mln ALDP and Azerbaijan leasing market IFC COUTRY SUCCESS

11 North-West of Russia Leasing market volume (bln. USD) Number of leasing companies NWLDP and NW Russia leasing market

12 Market volume (mln USD)Number of leasing companies Uzbekistan Central Asia industry diversification: Uzbekistan, Kyrgyzstan, Tajikistan CALP and Central Asia Countries

13 Tajikistan Number of leasing companiesMarket volume (mln USD) Number of leasing companies Kyrgyzstan Market volume (mln USD) Central Asia Countries

14 Annual volume of leases Ukraine Total volume of portfolio of leasing companies Number of le a sing companies ULDP and Ukraine

15 Mongolia Number of lesing companies Total outstanding volume (mln USD) MLDP and Mongolia leasing market

16 PROJECT COUNTRIES LEASING SECTORS Azerbaijan North-West of Russia Mongolia

17 Ukraine Central Asia PROJECT COUNTRIES LEASING SECTORS