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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.