Leasing: a modernised legal framework for financing investment
On Thursday 20 May 2026, the National Assembly passed the bill on financial leasing.
What is leasing?
Leasing is an arrangement whereby a financial institution purchases an asset (equipment, a vehicle, an industrial building) and makes it available to a business in return for regular lease payments. At the end of the contract, the lessee may purchase the asset at a residual value agreed in advance.
Its main advantage is that the asset itself serves as collateral, enabling businesses to access productive equipment without the constraints of traditional bank loans.
Why a new law?
Despite its potential, the leasing market in Senegal was in decline, with its banking penetration rate falling from 1.07% in 2021 to 0.69% in 2024. This decline reflected the limitations of a fragmented legal framework, stemming from the 2012 law, which left four major gaps unaddressed: the absence of rules on property leasing, the lack of a regime for Islamic finance (Ijara), the law’s silence on the liabilities of the parties, and the inadequacy of provisions governing the termination of contracts.
Furthermore, the UMOA Council of Ministers had adopted a uniform law on leasing as early as 2016. This law ensures its transposition into Senegalese law.
Five major innovations
Clarification of terminology: the law precisely defines sale-and-lease-back, construction leases and Ijara financing, thereby removing areas of contractual ambiguity.
Recognition of Islamic finance: Ijara financing is enshrined in law for the first time, opening up leasing to entrepreneurs who, for reasons of religious conviction, choose to avoid the conventional banking system.
Mandatory protective formalities: all contracts must specify, on pain of nullity, the description of the asset, its price, the term, the lease payments and the conditions of the purchase option.
Real estate leasing enshrined: businesses can now finance factories, warehouses and logistics hubs via leasing, without straining their cash flow.
Criminal liability of the lessee: the misappropriation, sale or unauthorised pledging of the leased asset is punishable by 1 to 5 years’ imprisonment and a fine of 300,000 to 3,000,000 CFA francs, thereby restoring the confidence of financiers.
What this means for businesses
SMEs can now access production equipment without a significant upfront investment, with fixed lease payments that preserve their cash flow. The secure legal framework encourages financial institutions to further develop this offering. For the first time, property leasing opens up a financing route for major investments. All these measures help to improve the business climate and support private investment, in line with the guidelines of the SND 2025-2029.