SANA'A - In the Financial Leasing Conference held in Sana'a on 25 April, Houria Sammari, director of the Program for International Finance Corporation, presented a paper on definition and characteristics of leasing key benefits of financial leasing.
In her paper, Sammari defined leasing, saying: "It is a contract between two parties whereas one part (the leaser) provides an asset for usage to another party (the lessee) for a specified period of time, in return for specified payments.
She also gave a definition for the financial leasing that is a form of credit arrangement including specific payments for a specified period of time in exchange for use of an asset for most of its useful life, with an arrangement or option for eventual acquisition.
"Leasing facilitates economic development by creating healthy competition on financial markets, increasing capital investments, developing small and medium-size enterprises (SMEs), developing secondary markets, improving efficiency and competitiveness of businesses and encouraging the replacement of outdated and run-down equipment," she said.
She also mentioned the advantages of financial leasing over traditional bank loans for SMEs.
"Financial leasing has simpler security arrangements, and lower transaction costs as well as flexibility and convenience,' she said.
The IFC works, she said, with governments to improve the legal environment, increase public awareness of leasing, build the capacity of leasers and lessees and promote new business and investment. She said that between 1997 and 2003 the corporation had approved about $1.4 billion in equipment leasing companies in 56 countries.
She concluded by citing Egypt as an example of IFC leasing investment technical assistance in the Middle East and North Africa.
By Observer Staff
© Yemen Observer 2005
