Egypt's finance ministry introduces new facilities for financial leasing providers

Doaa A.Moneim , Sunday 7 Jun 2020

A file photo of Egypt's finance minister Mohamed Maait (Photo: Al-Ahram)

Egypt’s Minister of Finance Mohamed Maait has issued a decree that introduces new tax facilities for finance leasing companies to revitalise the non-banking financial market, a statement by the ministry read on Sunday.

The new facilities, according the finance ministry’s statement, include deducting interests of loans and cash advances from companies’ net profits instead of calculating them not more than four times the ownership rights that involve paid-in capital, reserves, retained earnings, minus retained losses.

It aims to provide the required funds for purchasing commodities and services for consumption purposes in addition to stimulating buying and selling in the domestic market.

On 23 March, President Abdel-Fattah El-Sisi ratified law no.18 for 2020, which organises finance leasing activity in the domestic market after parliament’s approval.

The law gives the Financial Regulatory Authority (FRA) the authority over companies practising finance leasing activity and issue licenses for new ones.

The law organises the finance leasing activity not extended through the banking system.

According FRA data, leasing activity in the Egyptian market has hit EGP 70 billion.

In January, the FRA revealed the biggest leasing companies in Egypt in terms of market value between January 2019 and November 2019.

Technolease for Financial Leasing was in the first place having a market share of 20.2 percent and a total of leasing finances worth EGP 48.1 billion

Corporate Leasing Company was in second place, having a market share of 15.56 percent, while GB Lease, part of Ghabbour Auto Company, has maintained the third position with a market share of 8.35 percent.

The Cairo Leasing Corporation ranked fourth with a share of 5.5 percent, then QNB Al-Ahli Leasing with a share of 5.36 percent.

Global Leasing Company was ranked sixth with 4.56 percent, followed by BM Leasing, which ranked seventh with a 4.11 percent market share.

Al-Tawfeek Leasing Company came in the eighth position with a market share of 3.70 percent, then Al-Ahly Leasing Company with a share of 3.51 percent.

In addition, International Co. for Leasing (Incolease) ranked tenth with a share of 3.36 percent

The real estate sector has dominated the financial leasing contracts in the market with a share of 75.5 percent, followed by the vehicle sector with a share of 7 percent.

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