Financial leasing law was first introduced in 1995, with several amendments till the final law #176 introduced in 2018 as leasing and factoring law. This helped the streamlining of the leasing and factoring finance business in Egypt through numerous reforms that were introduced by the government to support the so-called Non-Banking Financial Services (NBFS) .

Egyptian financial leasing sector flourished during the last 15 years, the leasing services demand is currently surpassing supply for all segments of the market, from SME’s, to medium ticket sizes, to large tickets, and club /syndicated deals. As for the factoring services, it existed in Egypt since last century, however, number of players until 2017 did not exceed 4 players while currently the market accommodates 15 factoring companies and counting.

While demand is raising for NBF solutions instead of conventional banking finance, governmental reforms for economic growth, and developing the Egyptian financial system are major catalysts for any investor to step in the market.

Several Number of active market players are still limited from 15 to 20 companies among the 226 licensed companies.

Certain factors are expected to result in the continuing growth of the leasing and factoring industries even during the economic slow–down in Egypt. Such factors include, but not limited to, the government and regulator’s support, the time saving elements where these products take much less time and documentation compared to traditional banking and recently, the decrease in financing cost to the investor . These are key drivers for replacement demand (i.e. replacing existing bank loans with non-banking finance to benefit from time value, stability of cash flow and higher visibility for future business.

Lease and factoring finance companies have an edge over banks as being specialized in the asset-backed financing. The turn-around time for funding approvals is shorter, and the ownership for the underlying assets is considered to be more powerful collateral for the financier compared to normal conventional banking loans.