Mr Chairman, learning from others, some of the obstacles facing the leasing companies, include inability to attract funding and lack of adequate leasing expertise, can be overcome through formation of synergies and partnership with other industry players. I understand in the USA, for example, over 70% of leases are actually written through lease intermediary companies or brokers, who use their specialised skills to structure lease transactions in the best way possible for the benefit of both the lessee and the lease underwriter. Lease syndications and funding partnerships with bigger players should also be encouraged as these help to spread risk and reduce pressures on balance sheets of individual leasing companies. Ladies and Gentlemen, you will agree with me that there is vast untapped potential of leasing activities in this country. There is need to develop this line of business further. A developed leasing sector is characterized by a diverse range of financial services that include factoring and trade finance, term lending, corporate finance and investment advisory services, and corporate restructuring, treasury management as well as traditional leasing activities. But this is not the case in Zambia at  2  BIS Review 17/2007  present. Currently, the leasing sector is restricted primarily to the traditional leasing activities. This seminar has thus come at the right time, as the lessons learnt are vital to complement the Government’s efforts not only to develop the leasing sector, but the financial sector as a whole.
In the banking sector, there have been no bank failures in the recent past, reflecting stability in the financial sector Mr Chairman, the Government has shown commitment to continuing the economic reform programme. To this end, measures are being taken to ensure that the macroeconomic gains attained so far will be consolidated in 2007. Accordingly, Government is targeting Real GDP growth of 7.0% and inflation of 5.0%. Pursuit of these objectives is within the context of the long-term development objectives well articulated in the national long term vision, 2030. Part of this vision is enshrined in the Fifth National Development Plan (FNDP) from 2006-2010 whose broad macroeconomic objectives for the plan period are as follows: •  to accelerate pro-poor economic growth;  •  to reduce and stabilise inflation; and  •  to sustain a viable balance of payments and external and domestic debt position. At this juncture, Ladies and Gentlemen, allow me to share with you my understanding of the role of the leasing sector in economic growth. Clearly, the remarkable economic gains that I have outlined above would not have been possible without the leasing sector’s contribution. Leasing companies are specialized lenders that provide asset-backed finance. The assets financed by leasing companies include plant and machinery and motor vehicles. Traditionally, these assets have excluded chattels or personal moveable assets. Though the leasing sector has existed in Zambia since independence, the formal supervision of the leasing sector by the Bank of Zambia only began in the 1990s.