Yemen approves financial leasing law [Archives:2007/1053/Local News]
SANA'A, May 21, 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, international Finance Corporation (IFC) said on Sunday. The law establishes the legal framework for leasing, a financial instrument proven to increase access to finance for micro, small, and medium 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. Further, IFC will continue to work with tax authorities, helping them develop provisions on tax 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,” noted 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