The Central Bank of the Republic of Guinea (BCRG) is preparing to revise the country’s 2012 leasing law, with technical support from the International Finance Corporation (IFC). The regulator announced the work on Monday, 28 September, Ecofin Agency reports. The stated aim is to make leasing more accessible to businesses, particularly small and medium-sized enterprises.
The reform is at an early stage. No draft text, timetable or list of amendments has been published.
What the BCRG announced
The central bank justified the revision by the time elapsed since the law’s adoption. “More than 10 years later, the economic, financial and legal environment has changed, and market participants have gained experience. The framework therefore needs to be updated,” the BCRG said, as quoted by Agence Ecofin (TMG translation).
According to the central bank, the revision should do three things:
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clarify certain provisions,
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correct identified shortcomings,
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align the law with other applicable regulations.
A framework that has not produced a market
Guinea has had a dedicated leasing law since 2012. Law L/2012/005/CNT sets the rules for leasing transactions, the conditions for providing leasing services, and the rights and obligations of lessors and lessees. A BCRG instruction issued in December 2014 supplements it with accounting rules for credit institutions.
The market remains thin. An IFC assessment carried out at the BCRG’s request and presented in July 2024 identified only three active leasing providers: two banks and one specialised company.
The gap between expectations and results is measurable. When the IFC and the BCRG announced their first cooperation on leasing in June 2014, the IFC estimated Guinea’s potential leasing market at a minimum of about $130 million. It singled out small businesses and the mining sector as likely users. That support ran through the IFC’s Africa Leasing Facility, which works on leasing legislation, regulation and capacity building across sub-Saharan Africa. Twelve years later, three providers is the result on record.
Why leasing matters for Guinean businesses
Leasing finances equipment rather than the borrower’s balance sheet. The lessor keeps ownership of the asset until the contract ends, which reduces the need for real-estate collateral. That is often the main barrier for SMEs seeking bank credit.
The instrument fits Guinea’s equipment-intensive sectors: mining services, construction, transport and agro-processing. Contractors bidding for work linked to large mining projects need trucks, machinery and generators. Leasing lets them acquire these without tying up capital they do not have. This is a TMG reading of the mechanism; the BCRG has not published sector targets for the reform.
What the reform will need to fix
The 2024 assessment points to where the work lies.
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Taxation. The BCRG asked the IFC to look more closely at how value-added tax applies to leasing. If VAT is charged in ways that make leasing costlier than a conventional loan, the product struggles to compete, whatever the legal framework.
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Legal certainty. Lessors need fast, enforceable repossession when a lessee defaults. Clearer rules on the protection of financed assets, which the 2012 law already addresses, would lower the risk premium built into leasing rates.
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Market entry. With three providers, the market is highly concentrated. The revision will need to make it viable for more banks and specialised firms to offer leasing.
Who is concerned
Actor Stake in the reform SMEs and contractors Access to equipment finance without heavy collateral requirements Banks and specialised lessors Clearer tax and enforcement rules that make leasing profitable to offer Tax authorities The VAT treatment of leasing, identified as an issue for review Development finance institutions Potential credit lines or guarantees once the framework is clarified
What to watch
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The draft text. Whether the BCRG publishes a draft and consults market participants before it goes to the legislature.
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The VAT provisions. Whether the revision coordinates with the finance ministry, since tax rules may sit outside the leasing law itself.
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The legislative path. The stage reached at each step, from adoption through promulgation, publication and entry into force.
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New entrants. Whether additional banks or specialised lessors announce leasing products once the framework is clearer.
The 2012 law showed that a legal framework alone does not create a market. The revision will be judged on whether the number of providers and the volume of leases grow.