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Poland: Leasing in flying colours

| Author / Editor: Wojciech Traczyk / Theresa Knell

2018 was a very successful year for the leasing industry in Poland.
2018 was a very successful year for the leasing industry in Poland. (Source: Pixabay – Alicja)

The initial data gathered by an international organisation Leaseurope indicate that in 2018 the European leasing market recorded a growth by 7.3 % compared to the year before. The Polish leasing industry, thanks to a high level of enterprise financing, advanced from 7th to 5th position in the European ranking. This is the industry’s highest position in history.

The advancement of Polish leasing sector in Europe coincided with the 15th anniversary of Poland’s accession into the European Union and 25th anniversary of the Polish Leasing Association’s operation. During the last 25 years of transformation, the Polish leasing industry has been supporting our economy’s development processes. Without leasing, enterprises would have no chance to purchase the necessary machinery, equipment or means of transport, and the economy – to modernize. The industry fosters Polish innovation and is the kay source of financing for small and medium enterprises. Today, Polish Leasing Association (ZPL) member enterprises support over 30 % of all companies active in Poland.

Successful year

2018 was a very successful year for the leasing industry in Poland – the dynamic of investments financed via leasing and loan at the level of +21.8 % was the highest recorded by this industry in 11 years. In the second half of 2019, the growth tendency was maintained.

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From the data published by ZPL, it emerges that last year, the companies reporting to the association financed investments via leasing and loan of the total value of PLN 82.6 billion, however, in 2019, slower dynamics should be expected – to the level of approx. 5.5 %.

Leasing, anybody?

In Poland, leasing is mainly used by entrepreneurs – consumer leasing is developing slowly. Micro and small enterprises constitute almost ¾ of all clients of leasing companies. According to ZPL’s estimated data, the largest group of clients of the leasing industry constitute small and medium enterprises with turnover up to PLN 20 million. This group constitutes 73 % of all lessees (52 % are micro-companies with turnover up to 5 million and 21 % - small and medium enterprises with turnover between 5 and 20 million). The second group of lessees constitute large enterprises with turnover of over 20 million – 26 %. Individual clients (0.4 %) and public sector (0.04 %) still have a small share. Leasing is a cheaper and more flexible method of financing compared to a bank loan – opinion shared by 7 out of 10 entrepreneurs. It is particularly important that leasing does not require many formalities, it can be used to finance up to 100 % of the subject’s value and that it can be adjusted to the company’s payment schedule needs. The industry forecasts that this sector will remain the main drive for the growth of the total leasing market in 2019.

Compared to 2017, financing of construction equipment grew by as much as 45 %. At the same time, the value of leased medical equipment grew by almost 40 % and IT equipment by 10 %. It is worth emphasizing that from ZPL’s data, it emerges that in case of machinery and equipment, the value of financed equipment grew in every analysed industry.

Vehicles drive the market

For years, personal and delivery cars up to 3.5 tonnes have remained the most frequent subject of leasing – in 2018, they constituted almost half of all assets financed by the companies associated in ZPL.

In 2018, leasing providers financed over 391 thousand of them. In this group, personal cars, of course have no match – over 266 thousand of them drove onto Polish roads thanks to the support of leasing companies.

The second most popular market segment are machinery and equipment (including IT) with a 27 % share. In this segment, particular growth of production branches was recorded i.e. building equipment, printing machinery, machinery for the production of plastics and metal processing. This is influenced by the growing investment expenditure from local governments and the development of investments financed from the state budget.

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In 2018, the total value of investments financed by leasing companies in the segment of machinery and equipment amounted to PLN 21.7 billion, with dynamics at the level of +17.7 % (year to year). The highest dynamics of 45.4 % was recorded on the market of building equipment. Almost 40 % (39.1 %) was recorded on the medical equipment market and over 18 % (18.2 %) on the agricultural equipment market, almost 15% (14.7 %) on the plastics production and metal processing market and almost 10 % in IT financing.

Forecasts

When it comes to forecasts concerning investments in the machinery and equipment sector until the end of this year, analysts forecast the machinery and equipment sector to be the industry’s driving force in 2019. Record high utilization of production capacities in companies and very good results of industrial production and building industry lead to expectations that in 2019, the dynamics on the machinery and equipment market will reach the level of approx. 13 %.

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