Problems and prospects of leasing financing in Kazakhstan

Nowadays among the vast majority of countries with developed market economy, the financial leasing has become one of the most effective tool for financing renewal programs and extension of fixed assets of enterprises.

The phenomenon of leasing process pretends to be quite new and not researched enough, especially for Kazakhstan at present days; this is also leading to inadequate perception of its benefits, which should be realized by domestic entrepreneurs and state institutions as well.

Scientists do not have the same points of view on a term of leasing, besides, in the interpretation of its essence and nature.

The discrepancy between their opinions on what the leasing consists of is closely connected with the different interpretation of the history and development of itself.

Despite the leanings organized economic mechanism, its elements inherent in the form of rental relations were used by humanity rather effectively at all the stages of its development in various forms of production; the economic nature of leasing has still being remained ambiguous for a long time [1].

According to the opinion of the majority of researchers, the term financial leasing has its origin from English word expression "financial leasing", which could be translated as "финансовый лизинг", "долгосрочная аренда оборудования" (long-term equipment rent) in Russian language.

Only the word was borrowed from English language to Russian. However, the origin meaning of this term was not adopted by Kazakh legislation.

Among the overwhelming majority of scientists, it is considered to think that the term leasing was an American invention of the 50's of the previous century, which local entrepreneurs brought firstly to Europe, and later to Asia [2].

Although, the other half of scientists and practicians partly disagree with that opinion, they against strongly believe that such economic relations as leasing had been created long time before the present era.

The essence of leasing was also revealed quite properly by Aristotle, who, in his work called "Rhetoric", stated that: ""... wealth lies in the profitable use of property, but not in owning it in general...". Aristotle could not be considered as the inventor of the term "leasing," he was the first person who managed to provide the philosophical meaning of leasing relations.

The variance of different overviews on the aspects brought from the history and the following development of leasing itself related to various interpretations of this term as well.

When considering leasing as a form of long-term lease, it must be admitted that its history draws our attention back to antiquity.

The realization that in order to generate income it is not necessary to buy or possess the necessary property, land, any other sources, but rather to have the right to use them, and with the help of this way to receive the desired material benefits is one of the most significant discoveries of the past [3].

Regarding the place of leasing in a system of economic relations, several authors offer to make up the essence of leasing as a part of the rental relations system, which leasing has already implemented.

However, in economic theory as in practical activity leasing provided, especially, in the field of finances, it might also be characterized with the help of the following ways like:

1) method of lending business activities;

2) the method of purchase and sale of fixed assets or the right to use another's property;

3) the method of investment activity;

4) one of the forms of long-term lease;

5) operations made with the help of another's expense, or in another words, managing other person's property on behalf of the principal.

On one hand, the financial leasing is likely to be closer to the credit relations as its content kindred as well (providing loans for buying production funds). It is a possible comparison between leasing relations with providing commercial loan to leasing recipient from leasing owner according to agreement of purchase and sale by installments of payments for property transferred under financial leasing. Leasing can also be viewed as an activity which aim is in investing one's own or attracted financial resources in order to obtain profit on leasing payments.

On the other hand, leasing itself closely related to the rental mechanism [4].

Honestly speaking, the complex of all mentioned interpretations above give the full characteristics of economic essence contained in financial leasing.

The combination of credit operations, investing and commercial activities with rents and their usage at the same time allows creating new legal form of business called leasing, specifically, it also relates to financial leasing as one of its types.

Most academic economists more or less recognize the elements of credit, investment and rent function as components in a complex of leasing relations.

Nevertheless, if some group of researchers is likely to suppose that there is an equal presence of all three elements in a leasing operation, so others may take into account only one of the elements or even disprove the features of the others.

Analysis of the formation and further improvement of leasing in the field of world economic relations leads to the conclusion about the flexibility and complexity of the concept of "financial leasing".

In this new organizational and legal form of business, it could be observed the combination of credit operations, investment and commercial activities with leases at the same time.

Contrary, the process of identification of leasing relations with some other types of monetary-material relations is totally incorrect. After all, having passed through the complicated path of development, leasing itself separated and transformed into the sphere of economic relations of a higher level on the contrary with a rental, bank or commercial loan.

To sum up the results of research on the nature of property relations that form the basis of the leasing concept; it can be stated that financial leasing is a kind of property relationship, where one person (potential leasing recipient) refers to another one (potential lessor) with an offer to purchase a certain property necessary for the leasing recipient's main business.

The lessor while acquiring ownership of the relevant property, transfers the right of ownership and usage of this property to the leasing recipient for a particular fee and managed duration, with the possibility of following transfer the ownership of the leased asset after paying all the lease payments. In this case, the function of financing realized from the side of lessor, with the help of specific legal constructions assigns to the leasing recipient the rights and obligations associated with the transfer of the leased asset, the probable risks of its damage or destruction, as well as all relations regarding its maintenance and usage.

Thus, the term leasing is clarified according to the "On Financial leasing" Law declared by the Republic of Kazakhstan started from 5th July, 2000, where it is said that "financial leasing is considered to be one of the types of investing options, where lessor must transfer previously purchased and conditionally prepared by contract the object of leasing for the certain sum on the certain conditions due to the temporary owning, moreover for the duration at least 3 years usage for the sake of business purposes only".

The largest leasing companies in the Republic of Kazakhstan include nest companies such as:

- KazAgroFinance JSC;

- Astana Finance leasing company;

- BRK-Leasing JSC;

- Kazakhstan Transport Leasing Company JSC (formerly KazAvia Leasing JSC);

- Kazmedtech JSC.

Even so, these companies are able to assign the whole leasing market of Kazakhstan, the representatives of this field have been noticing the increased level of competitiveness: smaller players are about to actualize, their amount is still continue to increase as well as investing offers keep extending.

2017 was successful got the vast largest leasing companies of Kazakhstan whereas a particular number of players had been able to increase their volumes of business activity.

According to the Statistics Committee of the MNE RK (CC MNE RK), in 2017 the total value of financial leasing contracts measured as 224.1 billion tenge and increased on 34.4 percent compared to 2016.

Conversely, 41.7 percent accounted for the transportation out of the total cost of financial leasing contracts, 28.2 percent for agriculture sector and 7.7 percent for the manufacturing industry, the results are illustrated in Figure 1.

More than two third (69.7 percent) contracts are signed in Astana city, which is likely to largely dictated by the turnover of leasing companies with state participation in the capital, when in Almaty it is 24.9 percent only.

Figure 1. Financial leasing contracts volumes according to each industry, per percent

The structure of financial leasing contracts volumes in regional context apart from the state leasing companies is also presented in table 1 below [5].

Table 1. The structure of financial leasing contracts volumes in regional context apart from the state leasing companies during 2016-2017

In the regional context, apart from state leasing companies, about half of the volume of new deals falls on Astana city, and another 7% on Almaty.

In addition, the share of the South Kazakhstan region increased from 2 to 7 percent, which eventually took second place in the regional structure of new business in 2017.

The geographical scale of state-owned leasing companies activity is less concentrated: the three largest regions account for 52% of the volume of dealing in 2017.

With the help of KazAgroFinance transactions, the Northern regions have been staying as leaders in the overall structure of the new business not for the fist time.

The East Kazakhstan region annually increases its financial potential, even if it has not been included in the top five yet.

In the mid term prospective, state-owned companies will form the basis of the market due to the large scale of activity as before they used to do, however, competitiveness from private companies is still increasing, they expand their offer and develop market segments in which they were hardly ever represented before (for example, in leasing real property).

In conclusion, it should be mentioned that leasing financing in Kazakhstan has been developing rather slowly, then this industry is pretty far from making any significant contribution to the national economy, despite that leasing is achieving tops and increasingly consolidating its place in the list of financial tools.

BIBLIOGRAPHY

1. Burenin, V.A. Leasing Innovation / Burenin, V.A., Tsyganov, A.M. - M.: MGIMO-University, 2017. - 200 p.

2. Alekseeva, T.R. Leasing in the innovative development of the building complex: monograph / Alekseeva, T.R. - M .: MGSU, 2014. 160 p.

3. Gazman, V.D. Leasing Development statistics / Gazman, V.D. - M.: State University Higher School of Economics, 2016. - 592 p.

4. Shulin, Shi. General characteristics of the legal regime of leasing / Shulin, Shi, Feitao, Yue. - M.: Prospect, Institute of Private Law, 2015. - 374 p.

5. The dynamics of the leasing market: after the economy. RAEX "Expert RA Kazakhstan" according to the results of the survey LK [Electronic resource] URL: https: // www. raexpert. kz / researches /leasing_2017 / part1 / (date of usage 05/11/2018).