SANTO DOMINGO.-The Dominican Republic's Association of Multiple Banks (ABA) stated this Thursday that the approval of the Bill regulating Leasing in the Dominican Republic would constitute a great contribution to the national economy and would help micro, small and medium-sized enterprises (MSMEs) continue to access financing for assets that allow them to maximize their operations in an agile and secure manner, under an updated legal framework.
This is the position that the union has expressed in communications sent to the Senate of the Republic, where the bill is being processed, reintroduced last February by Senator Franklin Rodríguez and which is currently in the Finance Committee, in charge of studying the initiative.
The ABA explained that this bill is part of a highly relevant ecosystem of guarantees to boost MSMEs, along with the Factoring bill (factoring or invoice discounting), which is also being processed in the Upper House, and the Electronic System of Movable Guarantees (SEGM) that has been implemented since 2023.
In a press release, the ABA stated that its observations on the project seek to broaden the scope of this initiative to boost economic development, suggesting the inclusion of the leasing of movable goods, such as machinery and other assets, in addition to the real estate included in the legislation.
"This legislation would provide companies with a legal framework that would bring more clarity to this concept in commercial and legal terms and would allow companies to acquire machinery and equipment with deferred payment terms through installments, without assuming the significant costs of depreciation, with preferential financing rates and terms and, above all, with the possibility of renewal at low costs and exercising the option of definitive purchase according to their convenience," added the ABA.
Furthermore, the association reiterated the need to provide legal certainty and fiscal frameworks for these commercial services, establishing clear rules of the game regarding the rights and obligations of all actors interacting within the system.
He estimated that, if this were not the case, and if the figure and its equal treatment were not promoted, this activity – which is not exclusive to financial intermediation entities – would be negatively affected, reducing the potential growth of this product, especially in banking entities, with the consequent impact on the economic system.
Leasing or financial leasing in multiple banking
The Banking Association reported that, during the last four years, multiple banks have increased their financial leases (leasing) by RD$11,868 million, going from RD$9,142 million in 2021 to RD$21,010 million in February 2024, showing an accumulated growth of 129.8% in that period.
The ABA highlighted that financial leasing allows companies to make investments without having to disburse a large amount of their resources, while also benefiting from the use of assets that, at the end of the contract, they can exercise the option to purchase, should they wish to incorporate said assets into their assets.
