According to a report from the Global Times, eight Chinese commercial banks plan to launch financial leasing companies to expand their business and increase profits, but analysts warned that there are challenges involved as the sector is still at an immature stage.

The Times quoted an associate professor at the School of Economics and Management of Tsinghua University as saying, “After nearly two decades of development, China’s financial leasing industry is still far from mature.” The associate professor added, “Unlike large State-owned aircraft leasing companies, whose customers are always big enterprises, small and medium-sized leasing enterprises can suffer losses because they deal with less affluent lessees who sometimes fail to honor their contracts.”

To read the Global Times article click here.