Consulting Firm (the Consultant) to Conduct Diagnostic to Understand the Potential for Leasing

• Country: Nepal
• Summary: Consulting Firm (the Consultant) to Conduct Diagnostic to Understand the Potential for Leasing
• NPT Ref No: 64878590
• Deadline: 05 Apr 2022
• Financier: World Bank (WB)
• Purchaser Ownership: Government
• Tender Value: Refer Document
• Notice Type: Tender
• Document Ref. No.:
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• Description:
• Expression of Interest are invited for Consulting Firm (the Consultant) to Conduct Diagnostic to Understand the Potential for Leasing in Nepal. Scope of Work The Diagnostic will focus on the following, as part of the ecosystem review: A. Market Size and Demand: i) Identify high potential/priority market segments/sector (e.g. agriculture, construction, medical, specific industries, etc.) for leasing and determine the potential market size for leasing across different market players (manufacturers/dealers/importers, etc.). Determine potential investment volume. ii) Interact with specific stakeholders i.e. business associations, SME representatives, etc. to assess the demand for leasing in specific economic sectors and perceived challenges and opportunities; B. Financial Sector Review: i) Identify banks and non-bank financial institutions (NBFIs), which are providing asset financing/hire purchase facilities. Identify constraints and challenges faced by FIs in implementing hire purchase and lease financing, including regulatory/legal constraints, funding and risk, as well as targeting MSMES with this specific product. Determine the need to offer leasing vis-à-vis hire purchase financing; ii) Identify successes in any existing leasing programs and future opportunities for growth. Evaluate reasons for previous market failures, gaps and lessons learnt. iii) Assess the readiness, interest and appetite of the FIs to launch leasing and identify how IFC can facilitate FIs in launching lease financing; iv) Determine the need for setting up an independent leasing company or offering the product through existing NBFIs/banks in the country. C. Legal and Regulatory Framework and Tax Review: i) A detailed review of existing legislations and provide recommendation for legal, regulatory and tax framework including recommendations for institutional set-up, if needed, to promote leasing in Nepal. The review will focus on existing provisions in various legislations/regulations governing leasing as well as international standards such as UNIDROIT Model Law on Leasing (2008) and UNCITRAL Model Law on Secured Transactions (2017); ii) The review will also factor in tax, fiscal and accounting rules and regulations which apply to leasing transactions and assess the extent to which they create a level playing field between leasing products and other credit and acquisition finance instruments. This review will be carried out taking into account policy recommendations contained in the IFC Guidelines for Emerging Economies on Developing Leasing Market (2009); iii) Assess the understanding and commitment of the regulators and tax authorities to support lease financing (especially for the MSMEs). Ascertain policies/guidelines/incentives (including adoption of IFRS 16) which may be issued by the regulators and tax authorities to enable FIs to focus on leasing; iv) Identify appropriate regulatory and tax framework (with inter-dependency of other laws/policies), which needs to be put in place to support the development of the lease financing in the country. D. Review of Regional Best Practices and Learning: Review regional leasing models (Asia or global), which have been successful and relevant to Nepalese context, to recommend good practices that Nepal could adopt. Review the legal, regulatory and tax frameworks, which have been successful and how regulators and tax authorities have supported the development of the sector over time. A review should also include how these peer countries have successfully supported the flow of lease finance for priority sectors (as above) including analysis of how lease company capitalization and funding can be enhanced over the medium term, including the possibility of deposit mobilization. The findings can inform the recommendations for Nepal. E. Review IFCs investment models to support development of Leasing Sectors: Review options for IFCs investment models (equity versus debt), in context of regional dynamics and regulatory/legal/tax environment, to determine the most suitable option for IFC to participate in a potential leasing opportunity in Nepal, given the different economic returns on each option. Publication Date: 29-Mar-2022 Expression of Interest Deadline: 05-Apr-2022
• Documents:

 Tender Notice