This sector is one of the main sectors that
contributes to the economic growth and stability since it provides the means of
increasing local investment in economies.
It doesn’t require finance concrete guarantees and
approval terms whether this is in the form of long-term credit date or an asset
base to be used as guarantees, since the financial leasing sector is built on
the basis that profit comes from the use of assets not their acquisition, as
well as the tenant’s ability to achieve cash flows resulting from the asset’s
operation, thus leasing becomes of particular importance in small and
medium-sized industrial enterprises. This sector also proceeds in accordance
with the provisions of Islamic Sharia.
Being a financial instrument and a complement to the
bank credit, financial leasing tends to increase the financial depth and
contribute to the economic development through increasing the cash flows
directed to the productive sectors of the economy, hence supporting the
domestic production and improving the profitability of enterprises,
particularly small and medium-sized ones, as well as creating more job
opportunities which contributes to the alleviation of unemployment and increase
of economic growth rates.
Within the
efforts of the General Directorate of Mortgage Finance and Financial
Leasing in the PCMA to develop the appropriate legal system for the work of the
financial leasing sector, in a way that serves the achievement of the PCMA’s
strategy and objectives. The year 2019 witnessed important developments
about the ability of some companies to correct their conditions in accordance
with the provisions of the licensing instructions for financial leasing
companies and supervision No. (1) for the year 2016, as some companies were
unable to pass the period of correcting the situation successfully, which led
to the taking of disciplinary measures against these companies and the
suspension of their work in accordance with the provisions of the instructions.
In another
context, PCMA held a specialized workshop in cooperation with the Financial
Follow-up Unit for officials in the financial leasing companies regarding
combating the crimes of Anti-money laundering and terrorist financing, which
included a detailed explanation of the concept and risks of the crimes of
Anti-money laundering and terrorist financing and the international standards
issued by the Financial Action Task Force FATF for the two crimes of
Anti-money laundering And the financing terrorism, in addition to the results
of the national evaluation process for risks, as well as presented the latest
developments regarding the mutual evaluation process that Palestine state will
be subject to during the year 2020.
A
generalization has also been sent to the performing companies in the
financial leasing sector in order to raise their efficiency in anti-money
laundering and terrorist financing operations, also companies were requested to
strengthen their measures to combat money laundering and terrorist financing,
including the appointment and training of communication officers, and the
adoption of a guide to anti-money laundering policies and procedures by the
board of directors of the financial institution, maintaining records and
documents, and conducting self-assessments of the risks of money laundering and
terrorist financing, and other technical requirements related to the electronic
systems starting from the inquiry and ending with the raising of suspicion
reports.
During the
year, an extended workshop was held over a period of two days in Jericho, that
targeted the employees of the Ministry of Transportation and the Traffic
departments from the various governorates, the workshop aimed to introduce the
financial leasing, and clarify the mechanism in place for the registration of
leased vehicles, this workshop was based on the PCMA's keenness to educate all
workers in the Ministry of Transport, with regard to financial leasing and
reaching one level of understanding of the procedures that should be followed
in this regard, in all traffic departments in the various governorates.
By the end of
the year 2019, the number of leasing companies licensed by PCMA were (9)
companies. In contrast, the total value of investment contracts (Gross
Investment = Advance Payment) if available (+
(Payment Value*Number of Payments) + Purchase Option (if available) registered
with PCMA, is approximately reaches US 90.9 million dollars, which
represent 1,998 contracts, as at the end of December 2019, the total value
of contracts decreased by 1.3% compared to the end of 2018, while there was an
increase of 21.5% in the number of contracts registered at the PCMA.