CAIRO, EGYPT, Nov. 13—The International Finance Corporation (IFC) met with its joint venture partners in Cairo today to proceed with the setting up of ORIX Leasing Egypt (OLE), the country’s first leasing company. OLE will offer lease finance facilities to industrial and other sectors of the economy, enabling small and medium enterprises (SMEs) to grow and expand their operations.
Present at the meeting were Messrs. André Hovaguimian, Director, Central Asia, Middle East, and North Africa, IFC; Mahmoud Abdel Aziz, Chairman of National Bank of Egypt, the largest, government-owned, commercial bank in Egypt; Mr. Adel El Labban, Chairman of Commercial International Investment Company, the merchant banking arm of Commercial International Bank of Egypt, the country’s leading private sector bank; Mr. Yushio Uno, Director, International Headquarters, ORIX Corporation, Japan, the world’s largest specialized leasing conglomerate; and Mr. Humayun Murad, Managing Director, ORIX Leasing Pakistan Limited, a subsidiary of ORIX Corporation of Japan.
OLE will serve the needs of a broad base of clients who require medium and long term financial leases for capital goods, including plants and machinery; office equipment; and transportation vehicles. It will introduce a flexible financing instrument allowing enterprises to benefit from full financing as well as a schedule of lease payments. OLE will have a strong impact on the country’s financial system by extending and improving credit delivery.
“This investment will play a pioneering role in the establishment of a leasing industry in Egypt and the development of the productive private sector”, said IFC’s Mr. Hovaguimian. “It will also support the needs of SMEs, which are the main engine for economic growth.”
The new company is expected to be capitalized at LE 20 million (US$5.9 million equivalent) and the shareholders are expected to provide long term funding of approximately US$15 million. IFC’s financing package will consist of a loan for its own account of up to $5 million and equity participation of up to LE3 million (US$0.88 million equivalent) or 15 percent of the company’s projected capital.
The ORIX Group will provide technical and management assistance to the new company and Mr. Saeed Reza has been appointed as its first managing director.
IFC and the ORIX Group have worked together before. In 1993, IFC helped to establish Oman ORIX Leasing and plans to work with ORIX in other Middle Eastern countries.
In preparation for this project, IFC provided technical assistance to the Government of Egypt in framing legislation to enable financial leasing to be introduced.
IFC, a member of the World Bank Group, is the largest multilateral source of equity and loan financing for private sector projects in developing countries.
