Members of the Latvian Leasing Association have introduced an online database of unregistered leasing objects.
The database, built in cooperation with leasing companies from Estonia and Lithuania, has been built with the aim of eliminating double financing opportunities for unregistered leasing entities in the Baltic region.
The online database contains approximately 35,000 different types of unrecordable asset items, such as various types of farm equipment, excavators, printing and metalworking equipment. After the assets of all leasing companies involved in the scheme have been pooled together, the estimated number could be around 100,000.
Before concluding a deal with a client, each leasing company will have the opportunity to check online whether the property in question has not already been funded by another leasing company in the Baltic States.
Jevgenijs Belezjak, head of the Latvian Leasing Association, said: “Over the years, leasing companies in the Latvian leasing market, similarly to Estonia and Lithuania, have encountered cases where one and the same object has been co-financed by the same leasing company, which has, for the most part, been fraudulent. The reason for this possibility of double financing was the fact that until now there was no single register of unregistered objects, where leasing companies could verify the ownership of the object, as in the case of cars, for example, in the Road Traffic Safety Directorate.
“I am convinced that joining Latvian leasing companies to the online database of unregistered objects will minimize or completely eliminate fraudulent transactions in the unregistered objects segment in the Baltic leasing market.”
In 2018, the leasing portfolio in Latvia increased by 7.3%, according to data collected by the Latvian Leasing Association.
The most significant contribution was made by car leasing, and new contracts amounting to €401m (£346m) were concluded during the year. The Latvian leasing portfolio at the conclusion of 2018 was €1.67bn. Of this, 70.1% or was financial leasing, while 23% was operational leasing.