The proposed project involves establishing a long term relationship with America Leasing (AL or the company), Peru’s second largest specialized leasing company which targets specifically micro, small and medium enterprises (MSMEs), which are usually underserved by the large banks. The project would help AL fund its MSME portfolio growth, diversify its financing sources and strengthen its presence in the MSME segment. To achieve these objectives, IFC would be providing a $10 million long term loan and a technical assistance program. AL is a specialized leasing company supervised by the Peruvian Superintendent of Banks and Insurance companies. It started its operations in 1995, and currently operates as a leasing company offering finance leases. AL is the largest Peruvian specialized leasing company which is not part of a banking group. As of December 2006, the company held a 6.5% market share of the Peruvian leasing market, measured by portfolio amount, and a 14.1% market share, if measured by number of contracts under administration. AL’s is primarily involved in the transportation, industrial and commercial segments of the leasing market, which together represent 60% of the company’s leasing portfolio. The low average lease amount reflects the fact that AL’s target segments are small and medium enterprises. In fact, as of December 2006, 91% of AL’s leasing portfolio was in companies with less than $21 million in annual sales; the average size of AL’s contracts is $67,700, against $149,800 for the overall leasing market.