Financial leasing companies in Egypt are important in
the non-bank financial sector because they offer asset-based
financing to businesses. Unlike industrial or real estate firms,
they earn revenue from structured lease contracts. In these
contracts, clients use physical assets like machinery, vehicles, or
equipment while the company keeps ownership. These contracts serve
as secured financing, making the company's financial
statements, capital structure, and risk profile different from
other non-financial firms. Understanding this is crucial for proper
valuation.
The business model focuses on financial assets instead of
physical ones. For example, a lease for a logistics company's
truck fleet or a factory's production equipment brings in
income through the principal and interest in the lease, not from
the assets themselves. This setup affects how accounting is handled
under IFRS, influences the balance sheet, and determines
profitability and risk measures. The main
