31 May 2007
A newly adopted leasing law, signed by President Ali Abdullah Saleh, marks the government of Yemen's commitment to creating a favorable environment for the development of financial leasing, say supporters of the law. The law establishes the legal framework for leasing, a financial instrument that can increase access to finance for micro, small and medium-sized enterprises seeking to acquire capital assets. Sponsored by the Central Bank of Yemen, the law was drafted in coordination with IFC, the private sector arm of the World Bank Group. It establishes a clear set of rights and responsibilities for the parties of a lease and a new registry system for leased assets.
In addition, it introduces speedy leased asset repossession procedures and sets out basic tax and accounting structures that create a level playing field between leasing and other types of financing, such as bank loans. The IFC will continue to work with tax authorities, helping them develop provisions for taxes and accounting, as well as related legislation that is crucial to the sustainable development of leasing in Yemen. "The adoption of this law is the result of the partnership between the Central Bank and IFC," said Ahmed al-Samawi, Governor of the Central Bank of Yemen. "There is no doubt that the leasing law will benefit small and medium enterprises, encourage banks and investors to invest in financial leasing, and establish leasing companies.
These will provide the local economy with a new financing tool that will help reduce unemployment and poverty in Yemen," he added. Michael Essex, IFC Regional Director, said, "Active leasing markets play an important role in helping small companies finance productive assets worldwide. With better access to finance, private companies can raise production and create jobs. The passing of the new leasing law demonstrates the government of Yemen's commitment to expanding opportunities in the private sector." IFC's leasing program in the Middle East and North Africa helps governments improve environments, raise awareness of leasing and its benefits, build the capacity of local stakeholders, and make it easier to invest in the sector.
IFC is also active in similar initiatives in Afghanistan and Jordan. Leasing is an important source of medium- and long-term financing for companies, both in developed economies and in emerging markets. It is important for micro, small, and medium enterprises, which are typically underserved by the banking sector. Leasing allows such firms to finance capital assets, increase production, improve profitability, and create jobs.
The IFC has extensive experience in supporting leasing in the emerging market economies. In the past 30 years, the corporation has invested over $1.3 billion in 57 countries, co-founded the first leasing companies in 26 countries, and advised 35 governments on legal and regulatory environments for leasing. IFC Advisory Services in the Middle East and North Africa - IFC PEP-MENA - launched the Yemen leasing project in late 2005.
A newly adopted leasing law, signed by President Ali Abdullah Saleh, marks the government of Yemen's commitment to creating a favorable environment for the development of financial leasing, say supporters of the law. The law establishes the legal framework for leasing, a financial instrument that can increase access to finance for micro, small and medium-sized enterprises seeking to acquire capital assets. Sponsored by the Central Bank of Yemen, the law was drafted in coordination with IFC, the private sector arm of the World Bank Group. It establishes a clear set of rights and responsibilities for the parties of a lease and a new registry system for leased assets.
In addition, it introduces speedy leased asset repossession procedures and sets out basic tax and accounting structures that create a level playing field between leasing and other types of financing, such as bank loans. The IFC will continue to work with tax authorities, helping them develop provisions for taxes and accounting, as well as related legislation that is crucial to the sustainable development of leasing in Yemen. "The adoption of this law is the result of the partnership between the Central Bank and IFC," said Ahmed al-Samawi, Governor of the Central Bank of Yemen. "There is no doubt that the leasing law will benefit small and medium enterprises, encourage banks and investors to invest in financial leasing, and establish leasing companies.
These will provide the local economy with a new financing tool that will help reduce unemployment and poverty in Yemen," he added. Michael Essex, IFC Regional Director, said, "Active leasing markets play an important role in helping small companies finance productive assets worldwide. With better access to finance, private companies can raise production and create jobs. The passing of the new leasing law demonstrates the government of Yemen's commitment to expanding opportunities in the private sector." IFC's leasing program in the Middle East and North Africa helps governments improve environments, raise awareness of leasing and its benefits, build the capacity of local stakeholders, and make it easier to invest in the sector.
IFC is also active in similar initiatives in Afghanistan and Jordan. Leasing is an important source of medium- and long-term financing for companies, both in developed economies and in emerging markets. It is important for micro, small, and medium enterprises, which are typically underserved by the banking sector. Leasing allows such firms to finance capital assets, increase production, improve profitability, and create jobs.
The IFC has extensive experience in supporting leasing in the emerging market economies. In the past 30 years, the corporation has invested over $1.3 billion in 57 countries, co-founded the first leasing companies in 26 countries, and advised 35 governments on legal and regulatory environments for leasing. IFC Advisory Services in the Middle East and North Africa - IFC PEP-MENA - launched the Yemen leasing project in late 2005.
By Observer Staff
© Yemen Observer 2007
