Hungary—Deutsche Leasing

Client: European Bank for Reconstruction and Development

Duration: 2006-2009

Region: Eastern Europe and Central Asia

Country: Hungary

Solutions:

Deutsche Leasing Hungary signed a €10 million facility with the European Bank for Reconstruction and Development (EBRD) in 2006 to develop its business of leasing to small and medium-sized enterprises (SME) in Hungary as a part of the EU/EBRD SME Finance Facility for EU Accession Countries. The Deutsche Leasing Group is owned by 410 German savings banks that form the Sparkassen Group. It has been operating since 1962 and has been Germany’s leading leasing company since that time. DAI was contracted by EBRD to assist Deutsche Leasing Hungary, certain aspects of which were also applied to Deutsche Leasing’s operations in Czech Republic and Poland, to expand its leasing operations for the SME segment.

Sample Activities

  • Introduce or enhance quick decision-making tools to facilitate the approval of SME leases while ensuring a sound and thorough approach.
  • Enhance the evaluation, approval, and monitoring procedures.
  • Provide guidance on sectors the leasing company should consider targeting.
  • Train managers and lease credit officers in cash flow-based leasing analysis, operating leasing, accounting issues, risk evaluation and funding optimization.
  • Provide senior management with training on management, risk and sales techniques.

Select Results

  • Supported the bank to enter the agricultural equipment sector, which included a market assessment, assistance with product design and training, developing a scorecard, and training staff and management on all aspects in addressing this market segment. A viable portfolio of leases to this sector had been built by the end of the assignment consisting of 76 transactions for €2 million.
  • Implemented new bonus system for sales staff.
  • Developed training modules on risk assessment for sales staff to be conducted by risk management staff that focuses on financial statement assessment.
  • Developed an Express Leasing scorecard that was tailored to and implemented in each of the countries and which includes an agricultural component.
  • Improved workflow procedures for lease origination to increase efficiency while maintaining appropriate internal controls.
  • Trained staff on topics including: cash flow based leasing analysis, operating leasing, accounting issues, risk evaluation and funding optimisation as well as in application.
  • Provided mentoring to senior management staff on risk management and sales techniques.
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