IFC Publishes Study on Leasing Market in Jordan
In Amman:
Bilal Al Sugheyer
Tel: +962 6 567 8050
Fax: +962 6 567 8040
E-mail: BSugheyer@ifc.org
In Cairo:
Desmond Dodd
Tel: +2461 9140
E-mail: Ddodd@ifc.org
Amman, Jordan, October 19, 2009 —
IFC, a member of the World Bank Group, today released a study that assesses
the challenges and opportunities for the leasing market in Jordan. The
study pinpoints areas where government and leasing companies could take
action to encourage growth and strengthen the market and it identifies
how leasing could increase access to finance, particularly for small and
medium enterprises.
A Study of the Leasing Market in the Hashemite Kingdom of Jordan finds
that updated tax policies in specific areas would benefit the growth of
leasing and that improved risk management systems among leasing companies
would help enhancing its access to capital in response to the financial
crisis. The study covers leasing sector dynamics during 2007 and 2008 amid
the effects of the global financial crisis, and makes recommendations for
the sector to move forward. This is the third annual IFC study about the
sector in Jordan.
“With a new tax code currently being drafted, the Jordanian government
has a unique opportunity to establish effective tax policies that support
the leasing sector. For example, the study finds that clarification of
the tax treatment of leasing contracts and a level playing field between
leasing and other forms of credit would promote the leasing market,” said
Bilal Al Sughayer, IFC Project Officer. “Incorporating leasing into the
new tax code will enable lessors in Jordan to benefit from the opportunities
the new leasing law provides and help stimulate economic growth, create
jobs, and increase financing options for Jordanian firms,” Al Sughayer
noted.
The study was undertaken as part of IFC’s leasing project in Jordan which
is part of the IFC’s Leasing Program currently active in the region in
Afghanistan, West Bank and Gaza, and Yemen. Under its leasing project in
Jordan, IFC has supported Jordan’s efforts to draft, lobby and promote
leasing legislation to facilitate investments in this area and increase
access to finance for micro, small and medium enterprises by developing
the leasing sector. As a result of this work, IFC’s sponsored law on leasing
became fully effective on September 17, 2008.
Leasing is an important source of medium and long-term financing for companies
in developed and transitioning economies. It is an effective means for
increasing a lessee’s asset base, particularly in the new companies and
smaller businesses that play a key role in introducing innovation and competition
and creating jobs.
About IFC
IFC, a member of the World Bank Group, creates opportunity for people to
escape poverty and improve their lives. We foster sustainable economic
growth in developing countries by supporting private sector development,
mobilizing private capital, and providing advisory and risk mitigation
services to businesses and governments. Our new investments totaled $14.5
billion in fiscal year 2009, helping channel capital into developing countries
during the financial crisis. For more information, visit www.ifc.org.
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