Sector Overview

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 does not 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.

Accordingly, the Authority has undertaken to develop this sector and lay down the right foundations for building and creating an appropriate environment for its work. while encouraging investment, the Authority cooperates and coordinates with relevant stakeholders, such as the Ministry of Transportation, the Department of Land, and Taxation Departments at the Ministry of Finance, to find appropriate work mechanisms for this sector.
The Financial Leasing sector has undergone fundamental advancements on the legal and regulatory level which were culminated in the endorsement of the Financial Leasing Law by decree number (6) for the year 2014 by His Excellency President Mahmoud Abbas in January 2014. The law was then published in the issue (107) of the official gazette on 28/05/2014 and was enforced 30 days following to the publishing date.

The year 2016 witnessed a remarkable growth in the performance of financial leasing companies in the Palestinian market. This was translated into an increase in the financial leasing portfolio in terms of the number and value of contracts registered in PCMA. And what distinguishes the financial leasing portfolio is the diversity in the leased assets, which has expanded to include heavy equipment by 11% as well as vehicles that occupied 89% of the total portfolio.

In 2016, the financial leasing sector achieved a growth by 51% compared to the previous year, with a total value of investment contracts of more than $97 million at 2001 contracts by the end of December 2016, in comparison with 2015 with a total value of investments contracts of $64 million at 1206 contracts.