PMA participates in organizing a Workshop on Leasing for Palestinian Banks

In cooperation with the Palestine Capital Market Authority (PCMA), the Palestine Monetary Authority (PMA) and the Association of Banks in Palestine (ABP), the International Finance Corporation (IFC), which is the private sector investment arm affiliated with the World Bank, held in Ramallah a workshop titled “Financial Leasing: An Effective Tool in Promoting the Growth of the Banking Sector”. 

The workshop aimed at familiarizing bank senior management with the Law by decree No (6) on Financial Leasing which was passed beginning of 2014. Workshop objectives included enhancing deep understanding of the concept of financial leasing, its attributes, the differences from other available financing tools in the Palestinian market and the experiences of other neighbouring countries in relation to development and growth of the financial leasing industry, in addition to the investment opportunities available to expand banking business through the establishment of specialized bank subsidiaries. 

The meeting was opened by Dr. Nabil Qassis, Chairman of the Board of PCMA, Dr. Jihad Al-Wazir, Governor of the PMA, Yusuf Habash, resident representative of the IFC and Joseph Nesnas, Chairman of ABP. 

In his speech, Dr. Qassis asserted the significance of the activity of financial leasing and its impact of the growth and development of this sector on the Palestinian market, highlighting the key features of financial leasing. 

Dr. Qassis made clear that the workshop was held to increase knowledge and in-depth understanding of the financial leasing activity and that the workshop themes will be reviewing how banks can play an effective role in enhancing the relative availability of this financing tool. 

Moreover Dr. Qassis reviewed statistical data which illustrated the escalating growth of financial leasing activity, which rose by 248 percent until Q3 of 2015 compared with the corresponding period in 2014. The number of licensed companies also grew by 66 percent end of 2014 compared with the same period in 2013.

Dr. Qassis also touched on the fact that PCMA efforts were underway to finalize the organizational structure of the financial leasing sector. Additionally, PCMA held several awareness-raising and introductory workshops, for both specialized and public audience. He asserted that the PCMA work, in cooperation with work by other stakeholders, has expanded to include effective contribution to setting up the appropriate environment to support the operation of this sector.

Dr. Al-Wazir affirmed that the presence of highly competent and capable financial leasing companies lends the financial system an extra edge, given these companies’ vital role in promoting lending to investors. This is achieved by making a new financing tool available to investors, thereby contributing to the development of various economic sectors, subsequently resulting in the empowerment of the Palestinian economy in general. 

Dr. Al-Wazir added that, over the past few years, the PMA had signed several memoranda of understanding (MoUs) with private sector institutions, including financial leasing companies, with the aim to authorize such companies to benefit from the credit information system “Sijil-ly”. Through these MoUs, the PMA sought to ensure the soundness and stability of banking activity as well as better supervise it, while empowering SMEs and stimulating economic growth in Palestine. 

Mr. Habash highlighted the role of IFC efforts to develop SMEs and stressed the importance of enriching the Palestinian market with new financing tools that meet its current needs. He also supported the organization of similar meeting to introduce the Law by Decree on financial Leasing which was recently passed, beginning of 2014. Mr. Habash thanked the organizers of the workshop for their effort and for their past and present continued cooperation.

In his speech, Mr. Nesnas talked about the significance of financial leasing saying that it was an important supplementary financing tool offered by the banks. He asserted the need for banks to adopt the industry of financial leasing and the necessity for the issuance of relevant regulations and instructions to stakeholders, particularly with regard to the law on security of movable assets, so as to provide the appropriate working environment for the growth and development of the financial leasing industry. 

The ensuing debate was led by IFC international financial leasing expert Stewart Pirnie, who shed light over the experiences of neighbouring countries. Furthermore, Mr. Pirnie elaborated on the benefits anticipated from investment within this sector, the mechanism for the establishment of specialized financial leasing companies, their primary duties as well as oversight of such companies by the PCMA. 

The workshop was attended by notable bank general managers, regional managers and senior staff, in addition to representatives of ABP, loan insurance funds, PCMA, PMA and IFC.